Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — INDUSTRY

Financial Assistance

Mr. Chapman: asked the Secretary of State for Industry what was the total subsidy paid to British Leyland, British Shipbuilders and the British Steel Corporation in the last year for which figures are available; and what were the comparable figures for one and two years before.

The Secretary of State for Industry (Mr. Patrick Jenkin): Assistance to BL, British Shipbuilders and the British Steel Corporation was nearly £1·75 billion in 1980–81, £1·5 billion in 1981–82 and is forecast to have been about £1–25 billion in 1982–83. My forecast for 1983–84 is a further reduction to under £0·75 billion.

Mr. Chapman: I am grateful to my right hon. Friend for that information and I welcome the trend. Will he confirm that there has been a dramatic improvement in efficiency, especially in output per man, in those three industries? Will he further confirm that assistance to those industries represents a smaller proportion than hitherto of total Government funds available to industry?

Mr. Jenkin: The answer to the second part of my hon. Friend's question is yes. Support for those casualties of the

past will be less than 40 per cent. of my total budget for 1983–84 for the first time in several years. There have been notable improvements in efficiency. However, those industries must become fully competitive if they are to survive in today's world.

Dr. Bray: What is the Secretary of State's view of the proposal of BSC' s chairman to spend £100 million on buying an American steelworks and closing the strip mills at Ravenscraig? Is he aware that Ravenscraig is producing more than 35,000 tonnes of steel a week, that it is achieving a level of productivity that is better than 4·1 man hours per tonne and that it is expected to break even this month, contrary to the views of the chairman of BSC and of the Industry and Trade Committee?

Mr. Jenkin: The Government have received no formal proposal from the BSC about a deal with an American steel company. Negotiations of that type would initially be a matter for the corporation. The Government would expect the BSC to consult them about such an arrangement before any final decisions were taken.

Mr. John Grant: Did not the Minister of State show extraordinary ideological fanaticism last week when, in a speech about the steel industry, he suggested that its trials and tribulations were paving the way for privatisation? Will that not undermine further the moral of the industry and create additional uncertainty?

Mr. Jenkin: My hon. Friend made an excellent speech, which was well reported. The Social Democratic party believes that ownership, finance, the appointment of managers and accountability to the public are irrelevant to the problems of these industries. I profoundly disagree. The decisions that I and my colleagues have taken in recent years about those industries have convinced me that they ought to be in the private sector.

Sir Anthony Meyer: Could not those gigantic sums have been used to provide more jobs, possibly in the tourist industry? Failing that, would not those sums have been better employed in providing the country with decent social services?

Mr. Jenkin: I gave a full explanation of that decision in the House on 20 December 1982. Certain comments have been made by the Select Committee, to which the Government will be replying in due course. The Government took the right decision to maintain steel making at Ravenscraig.

Mr. Orme: Will the Secretary of State confirm that if the proposed agreement goes ahead, it could lead to the loss of 2,000 jobs at Ravenscraig, the closing of a strip mill and the investment of £100 million outside the United Kingdom? Does that not contravene what the Government agreed in December, which was to keep the five major plants open and fully employed?

Mr. Jenkin: As I understand the proposal that Mr. MacGregor has been discussing with the trade unions in Scotland, it would involve—as I think he put to them—a five-year guarantee for the off-take of steel made at the heavy end at Ravenscraig. As I said to the hon. Member for Motherwell and Wishaw (Dr. Bray), if the proposals involved the closure of the hot strip mill, the Government would need to be consulted.

Teletext

Mr. Colvin: asked the Secretary of State for Industry if he will report on progress in setting up Teletext.

Mr. Butcher: Teletex is British Telecom's text communication service which enables word processors and computer terminals to communicate over the telephone network. BT hopes to begin a service later this year.
I announced a Teletex promotion initiative in November 1982, offering £4 million support to stimulate the use of Teletex. STC, Mitel, Plessey, Ferranti and GEC have been selected to provide equipment starting in the autumn of this year.

Mr. Colvin: I should point out a misprint on the Order Paper? Teletex is spelt with an "x". There should not be a "t" at the end.
I am sure that the House will welcome my hon. Friend's announcement, which is further proof that the Government are putting their money where their mouth is on high technology. Will my hon. Friend take this opportunity to welcome British Telecom's initiative?

Mr. Butcher: My hon. Friend is right to say that Teletex should not be confused with Teletext. Teletex is a means of communicating text rapidly between terminals over the BT network. The scheme is one of enlightened purchasing, which is designed to pull through technology on a user requirement basis. It will leave the United Kingdom Limited very well placed in international markets.

Mr. Hoyle: I may agree with the Minister, but is it not also true that we are falling behind many of our competitors in information technology and technology in general and that we need even more money and an even greater drive?

Mr. Butcher: The hon. Gentleman should be aware that, under this Administration, there has been a huge shift of resources towards the new technologies, particularly information technology, under the guidance of my hon. Friend the Minister for Industry and Information

Technology. This is a most dynamic area of the market, and we are anxious to ensure that British companies begin to redress the imbalance in payments in high technology.

Space Programme

Mr. Michael Marshall: asked the Secretary of State for Industry how much Government expenditure there has been on the United Kingdom space programme in each of the last four years; and whether he intends to increase the budget for the financial year 1983–84.

Mr. Viggers: asked the Secretary of State for Industry how much has been committed over the last four years to the United Kingdom space programme; and whether he intends to increase the space budget.

The Minister for Industry and Information Technology (Mr. Kenneth Baker): Over the last four years my Department has invested the sums of £37 million. £44 million, £58 million and £64 million, respectively, in the United Kingdom space programme. The published estimate for 1983–84 is £61 million. Expenditure beyond that year has not yet been decided.

Mr. Marshall: Will my hon. Friend confirm that the majority of that expenditure represents our contribution to the European Space Agency? Does he agree that, although those contributions are matched by other member states within ESA, they produce a substantial return which has made this country the pre-eminent manufacturer of communications satellites in Europe?

Mr. Baker: My hon. Friend is correct. ESA is one of the most striking examples of the success of international co-operation in technology. It has ensured that Europe has a space industry, and we are one of the leading countries in the world—second only to America—in making communications satellites.

Mr. Viggers: Does my hon. Friend agree that many people still find it difficult to grasp the benefits of the space programme? Does he further agree that the programme is not science fiction or pie in the sky, but will be of real economic benefit both to industry and to employees in this country?

Mr. Baker: I agree with my hon. Friend. Few people realise how significant our space industry is. It employs about 3,500 engineers and has a turnover of more than £200 million per year. There are many jobs in it for us. In addition over the next 20 years the market for communications satellites will be worth about £10 billion. Britain cannot afford to fall behind.

Mr. Wilkinson: Does my hon. Friend agree that after Ariane IV and the space laboratory follow-on programme there are some fundamental decisions to be made for Europe? Would it not be better for this country to put more money into the ESA budget so that we may obtain decisions in favour of a manned space programme, reusable vehicles and so on?

Mr. Baker: In cash terms we have more than doubled the amount that we shall spend on space during the lifetime of this Government. I agree that there are some large projects in the offing, and I particularly want to support earth remote sensing, in which we have considerable skills.

Small Workshop Units

Mr. Mawby: asked the Secretary of State for Industry what is the rate of progress of completion and take-up of English Industrial Estates Corporation small workshop units.

The Under-Secretary of State for Industry (Mr. John MacGregor): Since 1 April 1982 EIEC has completed 782 small factories and workshop units. Four hundred and seventy-three have been let or sold to new occupiers. A further 106 units are reserved for new tenants who have not yet taken up occupation, and serious inquiries continue at well above the rate of recent years.

Mr. Mawby: Does my hon. Friend agree that that is one of the most effective ways of increasing our national income and of providing better employment prospects? How does the figure compare with previous years? Is my hon. Friend satisfied that everything possible is being done, or should more be done?

Mr. MacGregor: I agree that this trend and the progress that is being made are important, because, especially in assisted areas, there was a serious shortage of small workshop units for small businesses. Such units can add greatly to economic activity. The rate of lettings was more than double that of last year, which was itself a record. It shows that the corporation and the Government are justified in concentrating on small workshop units, because that is what the market needs. I should like to see that encouraging progress continue and the private sector involved rather more. Another encouraging aspect is that the corporation is finding that it is now getting a good return on the lettings of those small units.

Paper and Board Industry

Mr. Hoyle: asked the Secretary of State for Industry if he will take steps to assist the paper and board industry to become more competitive by help with restructuring and re-equipment.

Mr. Kenneth Baker: Companies in the paper and board industry, like other industries, can already benefit from a wide range of industrial support measures to improve their competitiveness.

Mr. Hoyle: Does the Minister agree that it makes more sense, is cheaper and more efficient to save rather than to create new jobs in the paper and board industry? If so, will he consider putting between £5 million and £10 million into Thames Board Mills, Warrington, to prevent it from closing, and thus save between 800 and 1,000 jobs?

Mr. Baker: I have met the hon. Gentleman and the hon. Member for Newton (Mr. Evans), as well as the chairman of Thames Board Mills, to consider the problems facing that plant. The company has told me that it has examined the possibility of keeping the mill open, but unfortunately it cannot foresee a viable future for it.

Mr. Moate: Does my hon. Friend agree that, given the increased use of indigenous raw materials, energy resources and new technology, there is no reason why the British paper industry should not continue to flourish and play a major role in the economy? Does my hon. Friend further agree that to achieve that we must ensure a flexible use of the Industry Act for worthwhile projects?

Mr. Baker: We provide support for various projects in the paper and board industry. There has been a freeze in

the average level of electricity prices for 1983–84. Of course, new investment is being made all the time. There is a big investment of £100 million in Workington and about £40 million or £50 million has been invested in Ellesmere Port by Consolidated Bathurst.

Mr. Campbell-Savours: Does cheaper energy in Europe damage the interests of British producers?

Mr. Baker: That is a very wide question. The disadvantage that high energy users have borne in this country has been to some extent reduced, although not entirely eliminated, by the adjustment in the value of sterling.

Electronics (Northern Region)

Mr. Dormand: asked the Secretary of State for Industry if he will make a statement on the development of the electronics industry in the northern region.

Mr. Butcher: The electronics industry is now considered to be one of the growth sectors of the northern region's economy. There are 120 companies in the region involved in electronics employing some 16,000 people. Of special importance is the growing number of smaller companies which have a positive attitude and are eager to expand into new markets, products and technology.

Mr. Dormand: Is consideration being given to the location of the next Inmos factory? Is a decision about the location to be made by the summer? If so, will the hon. Gentleman give an assurance that the northern region will be given full consideration? Could not a direct Government decision have an effect on the high level of unemployment in the north?

Mr. Butcher: The immediate problem for Inmos—although I hope that it will not be a problem for much longer—is the ramping up of production on its current site. There are no decisions on the locations of future plants. However, I am sure that the hon. Gentleman will be proud—at least hope he is—of the record of electronics companies in the northern region and the northeast, which have made a magnificent response to some of the Government's schemes, because they are moving into new markets in areas where there is a positive and growing balance of payments.

Sir Dudley Smith: I do not detract from the point made about the northern region, which I fully accept, but does my hon. Friend agree that there is also a very good case for persevering with the electronics industry in the midlands, which should form one of the main springs of future growth in the second industrial revolution?

Mr. Butcher: The midlands region—in particular, the west midlands—is conscious of the fact that there is an imbalance in the representation of industries in the region. The Department of Industry's regional office is conscious that more can be done in that respect, and we are anxious to help in any way we can. However, it must be remembered that these are demand-led schemes, and the response from the regions depends on the number of applications received from the companies within the regions.

Mr. John Garrett: Is the Minister proud of the fact, that, throughout the Government's term of office, our deficit in balance of trade in electronics equipment, has worsened?

Mr. Butcher: The major reason for the deficit is the imbalance predominantly in VRCs. There are examples now of companies wishing to come here and manufacture video recorders, but in regard to the main thrust of our policy, particularly in the areas where we can pall through new companies and technologies, such as the minis and the main-frame computers, the Government's record is nothing to be ashamed of. We have introduce some new growth in those areas.

Mr. Conlan: Is not the proof of the pudding in the eating? Would it not have been more beneficial to the northern region if the Government, through the Home Office and the Ministry of Defence, had placed orders for antennae for RAF Oakhanger at Baldock ratfte than with the United States?

Mr. Butcher: There is always a difficult balance to maintain in public purchasing orders. We have to balance the needs of users and the specifications they lay down in public purchasing policies with the capabilities of the United Kingdom industry. Wherever British companies, on merit, can win contracts, we are in favour of it, and will do everything to encourage it within the GATT and EC obligations placed upon us.

Manufacturing Investment

Mr. Hooley: asked the Secretary of State for Industry what is his most recent estimate of the level of investment in manufacturing industry in 1982.

Mr. Patrick Jenkin: It is £7·14 billion at today's prices, including leased assets.

Mr. Hooley: Is the Secretary of State aware that a sustained high level of investment is essential for competitiveness? Is not the Government's record disastrous in the four years in which they have held office?

Mr. Jenkin: The fall in investment is reflected by the severe effects of the recession in the United Kingdom. I am convinced that by far the best way to encourage investment is for industry to feel a recovery in its profit levels, for without profits it cannot hope to invest.

Mr. Proctor: Will my right hon. Friend reiterate the firm commitment that he gave to manufacturing industry on Thursday when he met representatives of the paper and board industry?

Mr. Jenkin: In response to my hon. Friend's request—[Interruption.] I do not know why hon. Members should laugh. This is a very important issue. I calculated recently—imagining a purely hypothetical situation—that if we did not have any manufacturing industry whatever we would have to earn about £70 billion a year from services, which is a ludicrous figure. Manufacturing industry is absolutely essential, and pert of the Government' policy is to encourage and promote the health of manufacturing industry.

Mr. Orme: Does the Secretary of State agree that manufacturing industry has suffered a mortal blow under this Government? Does he further agree that the Government's policy has led to manufacturing industry being made leaner, but not fitter? Does he accept that investment in manufacturing industry has fallen by 33 per cent.? What does he propose to do about it?

Mr. Jenkin: Industrialists wanted more than anything a fall in inflation, in interest rates, and in the increase in

unit labour costs. All those things are happening under this Government. They are the essential preconditions for our industry becoming more competitive.
I hope that the right hon. Gentleman has read the survey in the Financial Times today of the reports from industry, which show that a great deal of industry is now beginning to win back orders in Britain and overseas. That is what it is all about.

Development Areas

Mr. Allan Roberts: asked the Secretary of State for Industry what is the average length of time it takes to process development area grants

The Minister of State, Department of Industry (Mr. Norman Lamont): On average, regional development grants are now paid eight or nine weeks after receipt of the grant application.

Mr. Roberts: I know that the Minister is aware that the question relates to a firm called Fusidex, in my constituency, which has experienced considerable delays in getting Government grants. I received a letter this morning from the Minister about the matter. Will he do all he can to help the company, which is hoping to employ a considerable number of my constituents and has export orders, but none of which will come to anything if Government grants are not made available quickly?

Mr. Lamont: We shall, of course, do everything we can to help the company. My right hon. Friend has written to the hon. Gentleman about the matter. No application for regional development grant has yet been received from the company, although my officials visited the company and there have been discussions about selective financial assistance. The company made an application for urban development grant, which, as the hon. Gentleman knows, is a matter for my right hon. Friend the Secretary of State for the Environment, but we shall do all we can to help.

Mr. Warren: I sympathise with the concern of the hon. Member for Bootle (Mr. Roberts). Does my hon. Friend feel that the time has come to review the value of development area status to the country as a whole, bearing in mind that it is a considerable burden on industry, reduces its competitiveness, and is not available to substantial areas which would like to have the same opportunities?

Mr. Lamont: As my hon. Friend knows, there has been a fundamental review—the Quinlan review—of regional policy. We have completed the first stage and are now considering what further work needs to be done. My hon. Friend is right in thinking that very serious issues are involved.

British Leyland

Mr. John Hunt: asked the Secretary of State for Industry if he will make a statement on his most recent discussions with the chairman of British Leyland on capital investment for new product development.

Mr. Norman Lamont: There have been a number of discussions with BL about its capital programmes. Details of these are commercially confidential.

Mr. Hunt: Can my hon. Friend confirm that British Leyland is now firmly on course to achieve profitability within the next year or two years?

Mr. Lamont: British Leyland, as it has revealed in the summary of its corporate plan placed before the House, is on target to break even before interest this year, and is on target to break even after interest next year. It has been immensely encouraging that the new models, the Maestro and the Metro, have been so well received. I am sure that the House would want to congratulate British Leyland on the success of the Metro, which in February was the best selling car with 10·3 per cent. of the market.

Mr. Stoddart: Will the Minister accept our congratulations—I have seen the Maestro being made—on the new product? Will he assure the House that British Leyland will continue to have the support of the Government in developing new models for the future? Will he also ensure that British taxpayers' money will not be used by British Leyland to buy gear boxes and other parts from foreign lands?

Mr. Lamont: The hon. Gentleman will know that the purchase of components is a matter for the commercial judgment of British Leyland, but over 90 per cent. of the content of the Maestro has been purchased in Britain. I know that British Leyland intends that the overwhelming majority of its purchases shall be in Britain.
The Government will assist BL, but in its corporate plan—this will be welcome news to my hon. Friends—BL has said that it does not intend to apply for more money beyond the £100 million that I announced to the House a short time ago.

Mr. Grylls: When does my hon. Friend expect to be able to allow private sector investment to go back into major parts of British Leyland?

Mr. Lamont: British Leyland, in its corporate plan, has said that it expects to introduce private capital into its mainstream activities within the next two years. We hope that that will pave the way for the eventual return of the business to the private sector.

Mr. Stan Thorne: Has the Minister discussed with the chairman of BL the use of flexible machine systems and, if so, will he be buying British?

Mr. Lamont: Yes, we have discussed that matter with British Leyland. The hon. Gentleman will be aware that at Longbridge and at Cowley there is a high degree of automation and that those factories are planning to introduce flexible manufacturing systems. The vast majority of British Leyland's purchases are made in Britain. Where they are not, it is because what is wanted cannot be obtained at the right price.

Free Ports

Mr. Aitken: asked the Secretary of State for Industry what recent representations he has received from manufacturing industry concerning free ports; and if he will make a statement.

Mr. MacGregor: My right hon. Friend has received one representation about free ports.

Mr. Aitken: Despite that rather small harvest of support, will my hon. Friend nevertheless lend his Department's weight to backing the recommendations of the recent Treasury working party, which proposes early legislation to introduce free ports into Britain? Is my hon. Friend aware that free ports are likely to be good news to

British industry because, in the view of many British industrialists, notably Mr. Clive Sinclair, they are likely to produce new marketing opportunities and many new jobs?

Mr. MacGregor: I should make it clear that the primary responsibility for this issue does not rest with my right hon. Friend, which explains why there have been only a few representations to him. The Government are considering the report and will in due course announce their recommendations. As my hon. Friend will know, the working party recommended that free ports should be set up. I have no doubt that in so doing, it took into account some of the comments that he has made.

Mr. Anderson: Does the Minister agree that it would be an interesting concept to have one of the proposed new free ports linked with an existing enterprise zone? The Minister will be aware of the pressure of Swansea city council to this effect.

Mr. MacGregor: If the Government did decide to accept the recommendations in the report, widespread consultations would still be necessary before a decision on sites could be taken, because the working party did not consider individual locations. The working party did recommend that experimental locations should be chosen on the basis of demonstrated demand and economic viability.

Mr. Michael Brown: Following the question of the hon. Member for Swansea, East (Mr. Anderson), may I ask my hon. Friend whether he is aware that there is an enterprise zone in my constituency and a port just a few miles down the road, called Immingham? Will he be making representations to my right hon. and learned Friend the Chancellor in the event that he has something interesting to say on the matter in his Budget speech?

Mr. MacGregor: I note from the exchanges in the House the considerable interest in the free port concept, but it is not for me to make individual choices or make recommendations to my right hon. and learned Friend the Chancellor. If the Government did decide to go ahead, I am sure that full consultation would be undertaken over a wide area before individual sites were chosen.

Mr. Palmer: Will the Minister say something about the claims of the port of Bristol in these matters, which is at present a heavy burden on Bristol ratepayers?

Mr. MacGregor: It is already clear that many hon. Members would wish to put forward recommendations for individual sites, but as I have already said, it would be a matter for widespread consultation, if we went ahead, before these were chosen.

British Steel Corporation

Mr. Roy Hughes: asked the Secretary of State for Industry when he is likely to meet the chairman of the British Steel Corporation to discuss future investment in the industry.

Mr. Patrick Jenkin: In less than an hour's time.

Mr. Hughes: Will the Secretary of State advise the chairman of the British Steel Corporation to use his commercial judgment and to press for an early authorisation for the Concast plant at the Llanwern


steelworks, particularly as the works is breaking all records at present? That plant is vitally necessary to improve the finish of the product.

Mr. Jenkin: There is no proposal in the BSC corporate plan, which I am currently considering, for such a plant at Llanwern, but I shall certainly mention the hon. Gentleman's concern when I meet the chairman.

Mr. Michael Marshall: When my right hon. Friend meets the chairman of British Steel, will he take the opportunity to remind him of the advantages of privatisation in attracting capital and, indeed, in providing employee shareholding? Does he not agree that the BP pattern, which has been followed for Cable and Wireless, British Aerospace and the National Freight Corporation, goes a long way to depoliticise many of these great industries?

Mr. Jenkin: Mr. MacGregor must be one of the best private enterprise industrial managers in the world. He does not need convincing of the merits of the private enterprise system, not least after his experience over some years of trying to run a state corporation. He has had a tremendous success, but I am sure that he would recognise the enormous advantages of being answerable to the market and to shareholders rather than being accountable to Secretaries of State.

Mr. Orme: Is this the last meeting the Secretary of State will be having with the chairman of British Steel? We would all be very interested in the answer to that question. With regard to the corporate plan and to the points raised by my hon. Friend the Member for Newport (Mr. Hughes), when are we likely to see the details of the plan?

Mr. Jenkin: As Mr. MacGregor's term does not finish until the end of June, I think that I shall have the pleasure of many more meetings with him before then.
I had hoped to be able to make a statement to the House about the corporate plan before Easter, but this now appears to be unlikely. I can assure the right hon. Gentleman that I wish to come to the House with my conclusions on the plan just as soon as I can.

Mr. Hal Miller: Will my right hon. Friend emphasise to Mr. MacGregor that the House might not be willing to grant further investment in British Steel until there has been some resolution of the demarcation between the public and the private sectors and until there is a sure basis of competition for the future?

Mr. Jenkin: I hope that my hon. Friend noticed the remarks that were made by my hon. Friend the Under-Secretary of State when he spoke to the British Constructional Steel Work Association dinner last week about the proper delineation of the boundary between BSC and the private sector.
That is something that I should very much like to see and I have been discussing it both with the corporation and with BISPA. Progress has been much slower than I had hoped, but I have made it clear that I want to see very much faster progress in this area than has happened in the past.

Mr. James Hamilton: When the Secretary of State next meets Mr. MacGregor, will he tell him that a great deal of gloom was cast over my constituency when it was

made known this morning that 721 jobs on the tube-producing side will now be lost? Will he also tell Mr. MacGregor that the House will determine the future of Ravenscraig, not Mr. MacGregor?

Mr. Jenkin: I share the hon. Gentleman's concern about the redundancies in his constituency. They are the direct result of the end of the boom in the American oil exploration industry, of which I am sure he is well aware. The effect of the decision has meant that the number of workers in the plants in question will be just marginally below what they were before that oil investment boom took place. With regard to Ravenscraig, I have nothing to add to what I said in reply earlier to the question from the hon. Member for Motherwell and Wishaw (Dr. Bray).

Dr. J. Dickson Mabon: Reverting to that earlier question and to the answer the Secretary of State gave, may I ask whether, if he were to consent to a successful negotiation by MacGregor, he would regard that as consistent with what he said in December about the retention of Ravenscraig as an operating integrated plant?

Mr. Jenkin: The right hon. Member may know more about the details that Mr. MacGregor has in mind than I do. I have no firm proposal from Mr. MacGregor. The right hon. Gentleman's question is therefore hypothetical.

Mr. Beaumont-Dark: Does my right hon. Friend accept that many of us on the Conservative Benches are great admirers of the work Mr. MacGregor is doing at British Steel? After reading the recent Select Committee report, does he accept that Mr. MacGregor would be better occupied in continuing the task that he has set upon instead of moving to pastures new?

Mr. Jenkin: That is not a question for me. I have greatly admired Mr. MacGregor's work. Not the least of his achievements at the British Steel Corporation is the fact that he will leave in place a management structure with people who are well able to carry on the excellent work of restoring the steel industry to profitability.

Hunstanton Employment Area

Mr. Brocklebank-Fowler: asked the Secretary of State for Industry if he will now consider giving assistance to the Hunstanton employment area under the assisted areas scheme.

Mr. Norman Lamont: In his statement about assisted area gradings on 28 June last year my right hon. Friend made it clear that the Government do not expect to make further changes during the lifetime of this Parliament.

Mr. Brocklebank-Fowler: Does the Minister agree that the Hunstanton employment area, with unemployment at 28·8 per cent., is the only one in England with more than 25 per cent. unemployment that does not receive special area assistance? Since Corby has unemployment currently running at 21·3 per cent., and is an enterprise zone, if he will not consider special area status for Hunstanton, will he at least consider establishing it as an enterprise zone or, if free ports are introduced, as part of a free port.

Mr. Lamont: I agree that Hunstanton has high unemployment, although, of course, it is small in absolute numbers, which is a factor we take into account. The level of unemployment in East Anglia generally is fairly low.


I agree that the hon. Gentleman has a problem. It seems to me that the best way to tackle it is through CoSIRA. Hunstanton is a special investment area under CoSIRA. Recently, the Department of the Environment has given permission for the building of some small units and at Hesham there are to be 50–50 workshops developed with the West Norfolk county council. The problems of the hon. Gentleman's constituency are best dealt with through rural policies.

Mr. John Garrett: Does the Minister agree that the Government's policies on rural development have had no impact on rural Norfolk? Is not Hunstanton a good case in point? Have not the Government's cuts in public expenditure, backed by the Stone Age Tory attitudes of the Norfolk county council, meant that industrial development has been choked—not only in Hunstanton, but throughout rural Norfolk? The Government have done nothing about that.

Mr. Lamont: I do not accept the hon. Gentleman's remarks. Much work has been done by the Development Commission, especially in encouraging small businesses and factory building. The hon. Gentleman knows that, even under the Labour Government, there was no assisted area status for such areas in East Anglia. It is only because he is in opposition that he changes his mind.

Mr. Wilkinson: Does my hon. Friend agree that this case, as many others, exemplifies the position well described by my hon. Friend the Member for Hastings (Mr. Warren)? Is it not yet another argument for putting maximum effort into getting the national economy right, rather than seeking to iron out the local variations in employment by costly subsidies?

Mr. Lamont: I am sure that my hon. Friend is right. The most important factor in reducing unemployment in any area is national economic policies, not regional policies.

Industrial Design

Mr. Michael Morris: asked the Secretary of State for Industry when he last met the chairman of the Design Council to discuss innovation in industrial design.

Mr. Butcher: I have frequent contacts with the chairman of the Design Council, its members and its senior officials. I last met the chairman on 9 March, and my right hon. Friend will be seeing him later today when he opens the "Young Creators" exhibition at the Design Centre.

Mr. Morris: Does my hon. Friend think that the money spent on the "Design for Profit" scheme is well spent? Does the scheme involve the applied art colleges?

Mr. Butcher: The money committed to the "Design for Profit" campaign is well spent. The campaign is designed to persuade finance and managing directors of medium-sized companies that the skills of British designers can be used to better effect to help us to reconquer our domestic markets and to make inroads into international markets, where design is the key factor in the purchasing decisions of consumers.

Mr. Edwin Wainwright: Is the Minister aware that press reports claim that Britain is becoming old-fashioned, that our industry is short of young designers and that they have to go abroad to obtain posts? Will he take action to

ensure that our industries take advantage of the young industrial designers leaving our universities, and employ them, to ensure that we get new projects going in our industries?

Mr. Butcher: The hon. Gentleman makes a strong point. It is precisely because we wish more British-trained designers to be employed by British companies that we are mounting the campaign. I agree that it is a tragedy that some of the products now being bought in large volume in Britain were designed by British people and manufactured by foreign companies. We wish to redress that position through the campaign.

Mr. John Garrett: Why has the Department of Industry allowed the British Technology Group to sell to American companies two computer-aided design companies—one of which is already being run down by its new American owner? Is that not a case of public investment and expenditure on developing new design capabilities being transferred to American ownership? How does that serve the national interest?

Mr. Butcher: The benefits of computer-aided design, regardless of the ownership of the companies, should be better promoted in the United Kingdom. Before the controversy arose many multinational companies kept a disproportionately large number of their software engineers and designers in Britain, simply because Bri tish-trained designers are so good. We should ask what is the benefit overall to the United Kingdom economy.

Northern Region

Mr. Campbell-Savours: asked the Secretary of State for Industry whether he will convene a meeting of representatives of industry, local authorities and trade unions to discuss regional policy and other measures to deal with unemployment in the northern region.

Mr. Norman Lamont: I am all in favour of those concerned with industrial development in particular areas coming together to consider local problems, but I de not think that it is necessary for me to convene such meetings.

Mr. Campbell-Savours: Is the Minister aware that many people in the organisations in the northern region believe that the mild reflation forecast for this week's Budget, if unaccompanied by direct intervention and Government decisions to direct factories into the English regions, will lead to few jobs being created in the peripheral regions and more jobs being created in the major centres of population in the south? Is that what the Government really want? Is that the sort of divided society that they have set out to create? Why do they not consult those in the regions prior to taking the industrial component decisions in their Budget strategy each year?

Mr. Lamont: We spend a considerable amount of time talking to representatives of the northern region. It is ludicrous for the hon. Gentleman to say that the northern region has not received assistance from the Government. It has had £469 million of regional development grant since 1979, £77 million of selective financial assistance, considerable help—

Mr. Campbell-Savours: Answer my question.

Mr. Lamont: The hon. Gentleman called for intervention to help the northern region. It has had that


through regional policy, enterprise zones, assistance to the shipbuilding and steel industries and, above all, more than 90 per cent. of the northern area has assisted area status. It receives a great deal of Government attention.

Mr. Dormand: Does the Minister recall making a speech last year in which he urged companies to move their headquarters and research and development units to the regions? How many companies have done so? What is the Minister doing about it? Is he aware that some of us believe that it might have been only a "paper speech" and that he does not have any real interest in the northern region?

Mr. Lamont: The office and service industries scheme is designed to do exactly what the hon. Gentleman asks. There have been a number of examples of service industries and offices moving to the northern region. I shall write to the hon. Gentleman with details.

Loan Guarantee Scheme

Mr. Kenneth Carlisle: asked the Secretary of State for Industry whether he intends to extend the loan guarantee scheme; and whether he will make a statement.

Mr. MacGregor: I have now completed my review of the loan guarantee scheme. An announcement of the outcome will be made shortly. By the end of February this year 8,861 guarantees had been issued in respect of £295 million of bank lending.

Mr. Carlisle: Is my hon. Friend aware that the scheme has proved most satisfactory and helpful, but that it needs to be expanded? However, does that not depend on the banks having a positive attitude? Is he aware that there is concern that some banks are not being as helpful as they could be? Will he take steps to ensure that they play their part fully in the scheme when it is extended?

Mr. MacGregor: I am grateful to my hon. Friend for his complimentary remarks about the scheme. I have very much involved the banks in the current review that I am completing. They are aware that, despite all the efforts that they and I have made, there is sometimes a need for more knowledge and awareness by some of the bank managers. We have considered a report by outside consultants—Robson Rhodes — who also mentioned that point. Following the announcement of the review, I shall arrange for copies of that report to be placed in the Library.

Engineering Council (Grant in Aid)

Mr. Palmer: asked the Secretary of State for Industry how much of the grant in aid made to the Engineering Council of £150,000 under section 6 of the Industry Act 1981 had been spent up to 31 December 1982; and if, in view of the transfer of 30 staff from the Council of Engineering Institutions to the Engineering Council, he will make additional finance available to the council.

Mr. Butcher: I understand that by 31 December 1982 the Engineering Council had spent £499,000 of the £550,000 grant in aid which had been paid to it up until then. A further £182,000 was paid in January. Subject to Parliament providing the necessary funds, the Government are prepared to continue to help finance the council's initial running costs during its first three years.

Mr. Palmer: Is the hon. Gentleman aware that the Engineering Council, which was set up under the recommendations of the Finiston report, has made slow progress during the past two years? Does that not vindicate the view of many of us that there should have been legislation in the first place?

Mr. Butcher: I am not so sure that I can agree with the hon. Gentleman's assertion that slow progress has been made. The first priority has been to secure the voluntary approval of the members of the engineering profession through the recent ballot. I am delighted that engineers nationally have endorsed the move towards certification. I shall consider the hon. Gentleman's comments, and it may be convenient if I write to him later this week.

Steel

Mr. Teddy Taylor: asked the Secretary of State for Industry if he will make a further statement on the position of the steel industry.

Mr. Patrick Jenkin: I have nothing at present to add to the statement which I made about the British Steel Corporation on 20 December last year.

Mr. Taylor: Since that date, has my right hon. Friend been aware of any progress in persuading the continental countries of the European Community to make cuts in manpower and production similar to those that Britain has made? Does he agree that it would be outrageous if we were to make further cuts when, on the continent, no similar progress and no similar move has been made by EC countries, which in some instances have been increasing their production and capacity, instead of slashing it as we have done?

Mr. Jenkin: I can assure my hon. Friend that I have lost no opportunity to impress on the Commission and on my opposite numbers in other Governments that there is a need to match capacity and demand and that this will require them to make substantial cuts in their capacity. I am sure that my hon. Friend will have read the three wise men's report on the German industry. The Commission has received proposals from the French Government for cuts in capacity that are not out of line with those that we have already made. At a recent meeting with the Italian Industry Minister I received an assurance from him that there would be substantial cuts in the private sector in steel in Italy. The problem remains with the public sector in Italy. I shall continue to press this issue on Foreign Ministers in the Italian Government.

Oral Answers to Questions — ATTORNEY-GENERAL

Sir Oswald Mosley

Mr. Norman Atkinson: asked the Attorney-General if the Lord Chancellor will review the decision to withhold the details of the appearance of Sir Oswald Mosley before the Birkett tribunal for a period of 100 years.

The Attorney-General (Sir Michael Havers): There has been no decision to withhold for a period of 100 years the records relating to the interrogation of the late Sir Oswald Mosley before the Birkett tribunal. These papers are retained by the Home Office under the provisions of section 3(4) of the Public Records Act 1958 on the grounds


of national security and pursuant to an approval given by Lord Chancellor Gardiner in 1967. At my noble and learned Friend's request, my right hon. Friend the Home Secretary reviewed that decision a year ago. I understand that my right hon. Friend has no plans to reconsider the matter.

Mr. Atkinson: Is it not a fact that the 100-year ban imposed by the Home Office was designed originally to conceal the identity of current members of the Conservative party who, during that time, were known to sympathise with the idea that there should be a negotiated truce with Nazi Germany and a common front against the Soviet Union? Does the review that the right hon. and learned Gentleman is about to undertake involve the release of papers relating to the British Union of Fascists, or will it involve papers dealing with the arrest and imprisonment of Sir Oswald Mosley?

The Attorney-General: The hon. Gentleman has talked about the imposition of a 100-year ban, but that is not the fact. Authority was given by Lord Chancellor Gardiner for the Home Office to retain the papers. This open-ended retention has recently been reviewed. I have not read the report of the interrogation and I suspect that the hon. Gentleman has not seen it. I cannot deny what he says because I do not know what the report contains. I suspect that he is making an assertion on the basis of what he has been told and that it is very unlikely to be true.

Sir Kenneth Lewis: Does my right hon. and learned Friend agree that there would be much advantage to be gained from releasing these papers after such a long period? They might reveal what happened to an ex-member of the Labour party who created the Fascist organisation in Britain.

The Attorney-General: The grounds for the refusal to disclose the papers are based upon security and intelligence considerations. Those who have had to take the decision have been satisfied that it is in the public interest that secrecy should be maintained.

Mr. Campbell-Savours: That is no excuse.

Mr. Donald Stewart: There has been a welcome change in recent years and various Administrations have released such papers as early as possible. Will the right hon. and learned Gentleman consider releasing these papers now to avoid suspicion that there is some form of cover-up?

The Attorney-General: For the future there will be a review when approval for retention has been given by the Lord Chancellor. The review will take place within a maximum period of 20 years.

Mr. Warren: I appreciate what my right hon. and learned Friend has said, but will he put it to the Lord Chancellor for his consideration that at the next review the time will surely have to come when we should try to excise the scars that Fascism and Communism have scored across Britain during this century, and that revealing these papers would be in the best interests of democracy?

The Attorney-General: I shall ensure that my right hon. Friend the Home Secretary and the Lord Chancellor are made aware of that view.

British Union of Fascists (Public Records)

Mr. Newens: asked the Attorney-General if the Lord Chancellor will reconsider the decision to withhold certain public records relating to the British Union of Fascists for a period of 100 years.

The Attorney-General: I wrote to the hon. Member on 4 March explaining that at the request of the Lord Chancellor the Home Office is to review the closure period.

Mr. Newens: I am grateful to the right hon. and learned Gentleman for that reply. Does he not think that it is a disgrace that administrative means should be used to retain papers that relate to the interrogation of Sir Oswald Mosley and are eligible for release, and thereby prevent facts coming to light that could clarify the position of the establishment in the light of assertions by hon. Members on both sides of the House? Does he agree that it would be unjustifiable to prevent these records being released merely because a section of the establishment and of the Conservative party which was opposed to Sir Winston Churchill, the Labour party and others who took an anti-Nazi stand wished to conceal their support for a separate peace in 1940?

The Attorney-General: It is necessary to distinguish between the two types of control. There is the type of control that means that documents are retained by the Department which originally held them. That power comes under section 3 of the Public Records Act 1958. The other type of power takes effect when the records have been transferred to the Public Records Office and there is approval by the Lord Chancellor of the day that they should be retained in secrecy—in this instance they relate to the British Union of Fascists—for an extended period such as 100 years. It is interesting that the first order was made in 1959, shortly after the 1958 Act was passed, by Lord Chancellor Kilmuir, and was considered and confirmed for the 100-year period by Lord Chancellor Elwyn Jones in 1976.

Mr. Stokes: As there is no evidence of which we are aware that Sir Oswald Mosley was a traitor, unlike Blunt, Maclean, Philby and Burgess, why do we have this incredibly long period before the truth can come out?

The Attorney-General: Those who are responsible have to satisfy the Lord Chancellor that retention is justifiable. Over the past 20 years they have satisfied a Conservative Lord Chancellor and a Labour Lord Chancellor.

Mr. Arthur Davidson.: I accept that successive Lord Chancellors have confirmed the period, but is it not clear from what hon. Members on both sides of the House have said that there is a belief that these facts should be revealed as soon as possible? To reveal the truth would clearly be in the public interest and would stop some of the accusations and counter-accusations that are now flying about.

The Attorney-General: This issue was reviewed by Sir Duncan Wilson's committee. A White Paper was published last year in which all the issues that should be considered were set out in paragraphs 26 and 27. The Government accepted the committee's recommendation. Public interest concerns questions involving the general public and individuals. Sir Duncan Wilson's committee set


out three grounds for retention and these were accepted. It recommended that retention should continue if exceptionally sensitive papers were involved, whose disclosure would be contrary to the public interest, whether on security or on other grounds. Secondly, it recommended that retention should be continued if a case involved documents containing information and supplied in confidence which, if disclosed, would or might constitute a breach of good faith. I know that the hon. and learned Gentleman will be the first to recognise the importance of that.
Thirdly, documents containing information about individuals, the disclosure of which might distress or endanger living persons or the immediate descendants of those involved, are subject to the principles upon which the disclosure of documents operate. They were set out in the White Paper last year.

Mr. Speaker: Statutory Instruments—

Mr. John Hunt: On a point of order, Mr. Speaker. As we did not start this section of Question Time until 3.21 pm, would you exercise your discretion and allow me my question?

Mr. Speaker: Order. The thought was in my mind, but I thought that I might get away with it. I shall call the hon. Member because we did not start until 3.21 pm.

Unification Church

Mr. John Hunt: asked the Attorney-General if he is now in a position to make a further statement with regard to his application to the charity commissioners for the removal of charitable status from the Unification Church.

The Attorney-General: The chief commissioner having twice declined to hold an inquiry into the affairs of the two trusts, I wrote to him on 7 March calling on him to remove them from the register of charities. On 9 March I provided the chief commissioner with a detailed statement of the grounds for de-registration. It is now up to the charity commissioners to decide whether to take steps to remove the trusts from the register. They will require a little time to consider the statement.

Mr. Hunt: Will my right hon. and learned Friend explain the complacent and obstructive attitude shown by the chief charity commissioner in this case? If, as Mr. Peach now tells us, he is waiting for evidence to justify the removal of this so-called Church from the register, could his attention be directed to the transcript of the Daily Mail trial and to the anguish suffered by hundreds of parents in this country who have lost children to the Moonies and who look with despair at the charity commissioners' reluctance to take effective action?

The Attorney-General: Over the past 12 months I have provided the charity commissioners with all the transcripts that I believed would assist them in reaching a conclusion. They will also have had the opportunity of reading the Court of Appeal judgments. We had, of course, to wait until the petition for leave to appeal to the House of Lords had been dismissed. Thereafter, I moved quickly. I do not believe that it would be appropriate for me to comment upon the charity commissioners or the merits of the case, because they are now acting in a quasi-judicial capacity in reaching a decision upon my request.

Mr. Arthur Davidson: Nonetheless, as the Attorney-General has, to his credit, had to lean heavily on the charity commissioners and seems to have been faced with considerable difficulties in removing charitable status from a body that most people would regard as being distinctly uncharitable, when the question of reappointments arises will he consider changing the composition of the charity commissioners so as to appoint people with perhaps a broader view of life than the present charity commissioners seem to have?

The Attorney-General: The appointment of the charity commissioners is a matter for my right hon. Friend the Home Secretary. However, on the two occasions on which I asked the charity commissioners to set up an inquiry under section 6, it was a complete surprise to me that they twice refused that request.

Statutory Instruments, &c.

Mr. Speaker: By leave of the House, I shall put together the Questions on the three motions relating to statutory instruments.

Ordered,
That the draft Hire-Purchase (Increase of Limit of Value) (Great Britain) Order 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Valuation (Communal Accommodation) (Scotland) Order 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit (Amendment) Scheme 1983 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Archie Hamilton.]

ESTIMATES

[1ST ALLOTTED DAY]—considered

SUPPLEMENTARY ESTIMATES, 1982–83

Class XIII, Vote 23, Stationery and Printing Supplies to the Houses of Parliament, etc.

Parliamentary Stationery and Printing

[Relevant document: Second Report of the Treasury and Civil Service Committee, House of Commons Paper 228, Session 1982–83.]

Motion made and Question proposed,
That a Supplementary sum not exceeding £414,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1983 for expenditure by Her Majesty's Stationery Office on the reimbursement of the trading fund in respect of stationery and printing supplied to the Houses of Parliament and to United Kingdom Members of the European Assembly.—[Mr. Hayhoe.]

Mr. Edward du Cann: Since the procedure upon which we are embarking is novel, perhaps I may be permitted a few general words about it as Chairman of the Liaison Committee of Select Committee Chairmen. I was making a speech in France recently, and I was introduced as Monsieur du Cann, "M. le President de la Societé des Presidents", which I thought was something of an honour. When these matters are better understood, we can deal with the Supplementary Estimates. The historical role of the House of Commons, established, understood and practised after protracted and sometimes dangerous struggles, was to force the Crown and those acting in its name—the Executive—to account for their actions. That is what Members of Parliament are expected and trusted to do. It is what, in my view, we do not always, do adequately. We have allowed the Executive, as its role and authority in our nation's affairs has necessarily expanded, to dominate the legislature and thus to narrow the limits of effective parliamentary scrutiny and criticism of its actions.
It is the urgent duty of those of us who are proud to call ourselves House of Commons men to seek to increase the power of Parliament to open further the processes of government to examination by this representative body. That must increasingly include, of course, the process of policy formation. We need to let a little more daylight into what is done in our name.
The control of government is at the heart of Parliament. At the heart of government is the correct handling of our country's finances. For centuries the procedures of the House have been constructed around the process for evaluating carefully Government expenditure, Supply, Estimates, the Supplementaries, the Vote on Account, the Consolidated Fund Bill and the Appropriation Bill. We all know the complicated and stately dance through which we go every year, which is designed to see that our constituents' money is not wasted. We also all know that for many decades this process has been largely unproductive—a charade of concern with nothing much to show for it, as contemporary, I would argue, as a stately minuet would be—a fatuous charade, fun but largely pointless.
When was the last time, in the memory of any of us, that the House withheld from the Government money they estimated that they needed? I believe that one has to return to the early 1920s for the period when the House would sometimes force the Government to reduce an Estimate. Those with a keen historical sense, or someone as venerable as the Father of the House, might reflect that in 1919, in a daring foray into the heart of government, its doings and purposes, the House refused money to spend on a second bathroom for the Lord Chancellor, to find that it had already been spent. There has been agreement between all of us on the Back Benches that there is something seriously wrong with our procedures.
Every Parliament has its essence, patina and character. I hope that we, the "class of '79", as it were, will be remembered as a reforming Parliament. We shall be if we deserve to be and if we see through the processes that we have already begun. We started by making the fundamental change of establishing Select Committees to oversee Government Departments and their work on a continuous basis. In addition, we have now created these new opportunities for the House to debate Estimates against a background of Select Committee inquiries and reports. What we are beginning today is due largely to the recommendations of the Select Committee on Procedure chaired by my right hon. Friend the Member for Worthing (Mr. Higgins). I am sure that the whole House would wish to pay a warm tribute to my right hon. Friend and his colleagues on that Committee.
Today is our first opportunity in the Chamber to take advantage of what we have created. There was an earlier opportunity, when some winter Supplementary Estimates were laid before the House, but it was not taken because the Liaison Committee felt that, in the absence of suitable subjects for debate, there was no point in having a debate for the sake of it.
The themes of our debates today are perhaps not dramatic, but the principle underlying them is dramatic. The House has always said that it wants to control Government spending. It has now made such control easier to operate and it must ask itself how sincerely it wants to cut out inefficiency and waste when they are clearly displayed before its eyes.
The debate is a parliamentary occasion of some significance—a historic opportunity, if only on a minor scale. Perhaps most important, it is the precedent for much to come.
I wish to make one point for the record. The Standing Orders of the House provide that three days should be allotted to debate Estimates. I have no doubt that it would be the wish of the Liaison Committee and the House that


if only half a day is taken, as it will be on this occasion, the second half of the day should be carried over, so that two and a half days would remain. [HON. MEMBERS: "Hear, hear."] I believe that that is the understanding and I am grateful for the obvious support for that assertion. I hope that that view will be formally agreed.
We might have three separate debates, one for winter Supplementary Estimates, one for spring Supplementary Estimates and one for the main Estimates. However they are arranged, the total should always be three days. I know that some hon. Members think that the allowance of three days could be expanded with advantage.
The House, which is generous in these matters, will agree that some of the credit for our reforms can properly be given to the Government. I pay tribute to my right hon. Friends the Leader of the House and the Chief Whip, both of whom have been sympathetic to the proper desires and wishes of Parliament. This is not a party occasion—there has been as much support on the Opposition side; it is basically a House of Commons matter—but the Government have sensed the feelings of Back Benchers and translated them into our new procedures. I think it proper that, as the first speaker in the debate, I should pay tribute to the Government for that.
I especially draw that point to the attention of my right hon. and hon. Friends. Some may be in two minds about whether to support the motions if they are pressed to Divisions. If the arguments today or on any other day, whatever the political complexion of the Government in power, lead us to criticise some aspects of the Government's administration, we shall be doing only what the Government envisaged we should do, and we shall be acting to make good the mistakes of an over-large public service. That is surely in line with the prime policies of this Government and should be in line with the policies of any Government.
There need be no tears in the Whips Office if we make some modest cuts in the Estimates. On the contrary, the episode would, paradoxically, reflect credit on a Government who have not been afraid to seek the help of the House in weeding out instances of inefficiency.

Mr. John Roper: Does the right hon. Gentleman agree that a vote on such motions should be regarded not as a vote of confidence in the Government but as a decision by the House on a matter of housekeeping?

Mr. du Cann: I agree. Indeed, I would go further and add that there is a strong duty on the broad shoulders of hon. Members to insist at all times on value for money. Their national duties should, and I believe would, always take precedence over party loyalties. In any case, an insistence on value for money should be supportive of a competent Government.
As so often in the House, history is beginning in a small way and in a hurry. By the accident of the timetable, we are having to begin with the spring Supplementary Estimates, and we do so in a year when the fall in the inflation rate has reduced the need for them. In the batch of Estimates that the Select Committee looked at, there was no great scope for major economies, though there may be such scope on future Estimates days.
The hurry has been exacerbated by the early Budget. Hardly four weeks have passed since the Supplementary Estimates were tabled. In that period, they have been

examined in Select Committees, evidence has been taken on them, reports have been agreed in the Committees and discussed by the Liaison Committee, the House has accepted a timetable and we are now debating the Estimates.
The procedure has made inordinate demands on all those involved in it and we may have to look at it again, but I think that the House will wish to give credit to all who have made the procedure work against the odds.
The choice of subjects for today's debates was made by the Liaison Committee after full and spirited discussion. It is fair to take account of the fact that a Committee of 23 Chairmen, with immense experience of the House between them, has commended these matters to the close attention of hon. Members.
I start with Class XIII, Vote 23, on which the Select Committee on the Treasury and Civil Service has reported to the House. Her Majesty's Stationery Office is seeking £382,000 because in 1976 and in 1980 it failed to send returns to the Post Office for Hansard deliveries, so that the Post Office did not charge for them. The House may wish to know that the Public Accounts Committee has, on other occasions, expressed anxiety about the HMSO's system of financial controls and hon. Members may think, in the context of this particular piece of neglect, that there is much merit in the general comments of the PAC.
Since the original evidence was taken by the Select Committee, we have had some interesting further evidence from both HMSO and the Post Office. In particular, the Post Office's evidence shows that its auditors criticised the system for charging Government Departments as long ago as 1973–74 and in four of the next six years.
During that period, protracted negotiations were conducted with the Civil Service Department. Agreement was not reached until 1980 and implementation of it was achieved in two tranches, in April 1981 and April 1982.
If people had really got a move on, as they should have done, a new system might have been in operation before 1976, when the first HMSO error occurred, and certainly before 1981, when the second error occurred. In any case, there is something remarkable about the fact that auditors of the Post Office criticised the system of accounting year after year and no action was taken by the Civil Service Department.

Mr. John Garrett: Does not the right hon. Gentleman agree that this Vote to the HMSO is nonsense, now that the office has been set up as a trading fund? The costs should fall on the House of Commons Commission, because they relate to services provided for the House. Under the present arrangements, the accounting officer of the HMSO cannot be held accountable for the costs. Since the services are provided for the House of Commons, the costs should be included in the Estimates of the House of Commons Commission.

Mr. du Cann: The hon. Member for Norwich, South (Mr. Garrett) takes a keen and continuous interest in these matters. When he intervened, I was about to remark that it is surprising what larger horrors are discovered when a small stone is lifted. The hon. Gentleman's point may have some merit. The matter was discussed by the Treasury Select Committee. The matter is not quite as simple as the hon. Gentleman suggests, because House of Lords deliveries are also involved, but it is simple enough. The system was not working properly. The auditors to the


Department concerned reported on it several times, but neither that Department nor the Civil Service Department took any action. Furthermore, there was apparently no consultation between the Stationery Office and the sale office before figures were inserted in the Estimate. That shows an unacceptable casualness in the preparation of Estimates presented to the House of Commons.
Lastly, the evidence on this Vote and on the other Vote reported on by the Treasury Select Committee, but not chosen for debate, must lead one to question the effectiveness of the Treasury and its monitoring of HMSO's expenditure, and the way in which Estimates are presented to the House of Commons.
I have explained why we are starting today with a comparatively small Supplementary Estimate. We are also starting, as it may be right that we should, in our own building. The picture that emerges is not painted on a large canvas. There are no broad brush strokes to remind us of Crichel down. This is art on a small scale. It is a perfect miniature of inefficiency, a cameo of incompetence and casualness and of failure to inform the House properly.
This afternoon, not for the first time in this Parliament, Members of Parliament are giving notice that they will no longer be content to be a mere reactive body. We shall not be content to be mere commentators after the event on the already decided proposals of the Government of the day. The balance of authority has for too long tilted too far in favour of the Executive and against the people's elected representatives. We propose to alter that balance and restore an older and constitutionally correct emphasis, and this debate is an earnest of our intention.

Several hon. Members: rose—

Mr. Speaker: Order. Let me remind the House that this debate cannot last for more than a hour and a half.

Mr. Michael English: As the senior Labour member of the Treasury and Civil Service Select Committee, I should like to say that I wholly agree with the last words of its Chairman.
I cannot understand why, on so many occasions, simple matters, which would be dealt with fairly speedily in trade unions or in industry, take so long in government. This issue has been with us for more than 13 years. I should like to fill in some of the comments made by the Chairman of the Select Committee.
I shall quote some words given to us by the Clerk to the Committee, after checking with the Departments concerned. He said:
Following Corporation status in 1969 a Civil Service Department (CSD) Post Office (PO) working party was set up".
In other words, this was not even considered before 1969, when the House was considering whether there should be a Post Office corporation. There had been criticism for many years of the inadequacy of the Post Office accounts, so that it was considered that the Post Office should become a separate corporation. After it was all agreed by Parliament and had happened, the parties concerned finally got down to thinking about the consequences.
We must remember that we are talking about the Civil Service Department. That Department is now almost defunct. Its name was changed to the Management and Personnel Office but it is not abolished. That Department was responsible for efficiency in government. That is the Department that is being criticised. It waited until a

separate corporation had been created before it even considered how Government Departments should be charged for deliveries.
Parliament decided that the Post Office should be a separate corporation and it should charge everybody, including Her Majesty's Government and the House of Lords and the House of Commons. In 1969, a
working party was set up to look at the arrangements for Government Departments' mail." It "concluded that the system was unsatisfactory; negotiations went on for some time, but agreement was not reached on an alternative.
The first criticism must be of the new corporation. I understand that when an organisation suddenly ceases to be a Government Department and becomes a corporation independent of the Government it might not realise that it is autonomous, although it should, and should do something about it. It meekly accepted the Government's view that the Government should not be charged in the same way as everybody else.
The matter has been decided 12 or 13 years after it was first considered. There can hardly be a simpler comment than that about what is basically wrong with our system of government. There cannot be a better illustration of why we are having this debate today. Such a debate has been excluded from our consideration for 50 years.
Without the publicity of error there is no sanction upon inefficiency. Without it the inefficiency goes on. I shall not weary the House about the first lack of decision:
In 1978–79 a 6 month mat of public posting methods took place in selected Departments.
That experiment was still being tried, when all that was needed was an invoice. Generally in the United Kingdom, if one provides goods or services, one sends an invoice fairly quickly and one hopes that within a month, or within three months at the most, one will be paid. In this case 12 or 13 years later the accounting system was still not agreed. All that was needed in law was to send an invoice.
Although we can vote against the Estimate tonight, that will not worry the Post Office. According to its current accounts, which are available in the Vote Office, last year posts alone made a profit of £91·6 million and National Girobank a profit of £8·2 million. Slightly more than £400,000 will not worry the Post Office.
If, after so many years, an organisation suddenly wakes up to the fact that it should have charged for a service, even when it has discussed the method with the Government for many years, it should suffer the consequences.

4 pm

Mr. Terence Higgins: As my right hon. Friend the Member for Taunton (Mr. du Cann) has pointed out, this is the first occasion for a long time that we have had an opportunity to debate a specific Estimate. I hope that the new procedures that have been adopted will enable hon. Members to keep a much tighter grasp on Government expenditure and the manner in which taxpayers' money is expended. I join my right hon. Friend in saying that the reforms put forward and accepted by the Government have been achieved on the basis of Government co-operation. I believe that there was a widespread feeling throughout the House, not only on the Back Benches but also on the Government Front Bench, that there was a need to redress the balance between the Executive and Parliament. I am glad that some progress has been made.
I should like to make one or two specific remarks about the procedure itself. It is interesting that, at the end of the day, we can make a specific decision. This contrasts with the debate last week on the public expenditure White Paper when the consequence, even if the Government had been defeated, was that nothing would have happened. The previous Government were defeated in a debate on the Government White Paper. The result was absolutely nothing. It is salutary, therefore, that hon. Members should have the opportunity to debate the Estimates and also specifically to vote on them. We should also be grateful to the Government for arranging these proceedings on a half day.
I am sure that it is the intention that at least three days should be spent on Estimates debates. From time to time, particularly on Supplementary Estimates, it is appropriate that time should be divided and that a half day rather than a full day should sometimes be provided. I should like the Leader of the House to note that the present debate lasts for one and a half hours and that, with another debate on a Foreign Office Estimate to follow, there will be something of a lacuna before we come to a vote. The gap between the debate and the vote is not highly satisfactory. This is an issue to which more attention should be given. I understand that, at the end of the day, there will be votes on all outstanding Votes. When a half day is allocated, there may be a case for making it the second half of our proceedings rather than the first.
The machinery that now exists has worked pretty well on this occasion. It is important that the Select Committee should have the opportunity to examine the Estimates, take evidence on them and then report to the House. It is not likely that debates will be effective without a proper report having been produced and without evidence having been taken on particular items of expenditure that hon. Members are to discuss. It is true that the sums involved today are not great. No one supposes that the debate and the vote will have an enormous effect on the Budget of my right hon. and learned Friend the Chancellor tomorrow. However, it is possible that on future occasions—for example, on the main Estimates—a significant and large sum of money would be involved. That is not the case today. None the less, the Estimate under debate raises some important points of principle.
It is worth hon. Members reminding themselves that the debates we can hold on such Estimates are only for reductions and not for increases on particular items. There are divisions of opinion about this procedure. My own feeling is that it is right that we should maintain the royal prerogative. It is also important that our debates should be genuine and that hon. Members should be concerned to see that the sum of money involved is reduced, or at any rate that the debate should be concerned with whether or not it is reduced, rather than a more general debate on some token reduction. To go along that route would mean rapidly reverting to a situation that existed for many years, when Opposition or Back Bench Members chose a debate on a general subject. We need to confine the debates to the particular Estimate that we are in a position to vote upon.

Mr. Frank Hooley: We are placed in some difficulty today by the action of the Government in putting down a token Supplementary Estimate in

relation to the second half of this afternoon's procedures. This has precluded the Select Committee doing what it wished and making a real reduction instead of a token one.

Mr. Higgins: The hon. Gentleman raises an important point. There is a distinction between debate on a token Estimate and a token reduction. The latter, it seems to me, presents the real danger to which I have referred. Nevertheless, if the form of the Estimate is such that it is only a token Estimate, it is right and proper that it should be debated, because the House has the opportunity to express a view upon it. This may be increasingly important in the future if some of the evidence that the Select Committee on Procedure has taken into account recently suggests that we should have Estimates that involve massive increases in later years but only a small expenditure in the first year suitably designated. In that case, if we wanted to stop the thing dead in its tracks at the beginning, it would probably be on a token Estimate. There is a distinction between a token Estimate that we can rightly debate and a token reduction, which might merely be a device that the House is employing.
It would be wrong for the Government to regard the result of a vote as a vote of confidence. It is possible that, at some point, there is a dividing line. It could happen that the particular Estimate being debated involved vast sums on which the whole Government economic strategy was at stake. In those circumstances, one can understand that the Government should feel that it is a matter of confidence. Generally speaking, however, I do not envisage that this is likely to be the position. One might also hope that, if the arguments in such debates were persuasive, the Government would decide to withdraw the Supplementary Estimates rather than proceed with them.

Mr. English: It is fair to say, I think, that the Government have not applied a three-line Whip. Is it true, however, that they have put on a two-line Whip?

Mr. Higgins: It is understandable that, at the end of the day, if we are to vote on all the outstanding Votes, the Government have some interest in ensuring that they are passed. I understand that otherwise the entire mass of Government expenditure would come to a sudden halt. That would be a rather undesirable circumstance.

Mr. English: In this case, as I pointed out, the only effect would be that the taxpayer did not pay £414,000 or whatever but that the Post Office would pay it out of £91 million plus £8 million from giro.

Mr. Higgins: My understanding is that there are more Votes at stake at the end of the day than that now under discussion. In any case, the Whip merely says that one should be present rather than instructing hon. Members how to vote. It is perhaps possible on Estimates of this kind to adopt a flexible attitude on the merits of the case. I hope that this is so.
I wish to make some remarks about the form of the Estimates. If we are to have sensible debates and if Select Committees are to be alerted to which Estimates are particularly important, the description of the Estimates is most important. I would not wish to stray out of order, but I believe that the comments of the Treasury and Civil Service Select Committee on Class XIII, Vote 22, as against Vote 23, gives cause for disquiet. The figure in the 1982 White Paper for that item was shown as £767,000. That was for a 50 per cent. discount. An Estimate was then


presented for the same amount of money but only apparently for a per cent. discount applying to those in public libraries and so forth. A revised Estimate then left the sum of money the same but with a 50 per cent. discount. Finally, there was a Supplementary Estimate stating that it was to maintain the 50 per cent. discount.
I am deeply concerned over the manner in which those Estimates were described. It is reasonable for the House to complain about an Estimate that mentioned a 40 per cent. discount, ignoring the fact that it had been 50 per cent. since 1924, with no note at all to say what was going on and lacking any subsequent history on the later amended Estimate and, indeed, the final Supplementary Estimate. I hope that my hon. Friend the Minister of State, Treasury, who is to reply, can give us an assurance that the future description that appears on the Estimates will be more illuminating than that set of descriptions. That is something of the greatest importance, and particularly so as presumably the Treasury Ministers approve the description that appears on the Estimates.
That is not to say that this is not an onerous task to place on Treasury Ministers. They have to look at an enormous range of Estimates, but none the less in this case Class XIII, Vote 22 was clearly an Estimate to which a great deal of ministerial time was devoted, and therefore Ministers were in a good position to know precisely what an accurate description would be of what was going on. I fear that it was not presented in a way that enabled the House to form a clear view of it in the absence of the investigation that could be carried out by a Select Committee under the new proposals.
Class XIII, Vote 23 is related to the charges made for delivering Hansard and House of Commons papers to individual hon. Members. This service has deteriorated considerably in recent years. It used to be the case that the report of the previous day's debate invariably arrived on one's doorstep with the first post and before one resumed one's duties in the House. That is almost invariably not the case now, even in London, and we need to consider whether we are getting the service for which we are paying—or, rather, for which we are not paying. That is a particular aspect of the problem.
Another point is that the Supplementary Estimate is not based on hard facts. It appears to be a negotiated settlement between the Government and the Stationery Office. When dealing with taxpayers' money, that must give one cause for concern. The whole problem goes back, as has been pointed out, to 1976, which is a long time. I am not clear to what extent the Post Office has a claim at this late stage. Perhaps my hon. Friend the Minister could tell us whether this is something that we are doing out of the goodness of our hearts rather than because there is any legal obligation for the Government to meet the bill that the Post Office has at long last presented.
A further point is that we have been told that it is not only the £325,000 that is now being asked, following negotiations, but that there may be a further sum for value added tax. The House needs to know whether this is simply to be rolled up in this Estimate or whether some further Supplementary is to be presented. At all events, this raises a difficult question as to who has not been accounting to the Customs and Excise for the VAT that should have been charged and has not been charged. I know that there are severe penalties for not completing the VAT form in the correct way. It would be wrong if the

Government were not to fill up forms and meet the VAT requirements in the way that everybody else is obliged to do.
A point of considerable general principle needs to be clarified. Some of these services are said to be demand-determined—that is to say, it is impossible to estimate precisely what the cost will be because the demand for the particular service may vary. Generally speaking, that expression has been used in relation to social security benefits, pensions and so on. It is purely a cash figure. It has not been used in relation to something for which both a price and a quantity are involved. We seem to be in an odd position over the Estimate. We are told that it is cash-limited but at the same time that it is apparently something in which the sum involved is demand-determined. This is an important point of principle; one cannot have both those things going on at the same time.
Auditors have already been mentioned, and the Treasury Committee has not been provided with additional information, in particular the letters from the auditors that were sent following their audits each year. It is obvious from that that over the years the auditors have complained about the way in which the Post Office and the Stationery Office have dealt with their accounts, yet nothing has been done. In the last management letter, dated 1980, the auditors say that they hope they will be kept up with developments. This debate should do that.
However, it would seem that the auditors, while their management complains about the system, make no complaint about the fact that the money had not been demanded and paid. One understands that in the context of normal accounting procedures this is not said to be something that is material, given the overall size of the Post Office operation. None the less, if money were due and had not been paid, that was something on which the auditors should at least have commented. Even if the auditors did not qualify the accounts, they should have brought the matter to the attention of those concerned. This also makes a strong case for the Parliamentary Control of Expenditure (Reform) Bill, introduced by my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), because if the Comptroller and Auditor General had been more actively involved, it seems likely that this point might have come up in the course of discussions on the accounts of the Stationery Office and the Post Office.
However, we are looking at the overall picture, which gives us considerable cause for concern and raises many points of principle. It suggests that the control that has been exercised by the Treasury in this context has not been adequate. In particular, the way in which the Estimate has been formulated has apparently been carried out without proper consultation with the Deliverer of the Vote, who is in the best position to know what the Estimate should be.
The issue raises important points that need to be answered by the Government. I hope that this will provide an opportunity for the Minister to reply, and that we shall have other opportunities on future occasions to look at the Estimates more precisely and with greater knowledge, provided by the Select Committee on Procedure, than has been the case in the past.

Mr. Arthur Bottomley: I should not have intervened in the debate had it not been for the proposition of my hon. Friend the Member for Norwich,


South (Mr. Garrett) that responsibility for the Estimates should be that of the House of Commons Commission. I have heard it said that if this Supplementary Estimate had been the responsibility of the Commission, the errors reported might not have occurred. That may be true, but it does not justify changing the whole system. The Commission is responsible for policy and assists in initiating demands for papers. That is a fact, and it cannot be ignored. For this reason, the Commission has considered whether it should accept responsibility. However, the Commission does not control the demands of Parliament any more than Her Majesty's Stationery Office does. It has no control over the combined activities of Members of Parliament, whether on questions, motions or amendments. The demands of Members of Parliament must be met. It is no good telling hon. Members that we do not have the money to pay for their demands. In many ways, we are in the same position as the Stationery Office.
Since the early 19th century, the Stationery Office has been responsible for this and, therefore, it has great expertise. It is by no means sure that if the Commission took over the responsibility, it would not have to go to the Stationery Office continually to use its expertise and to get its guidance. In some ways, this would generate more, not less, work.

Mr. English: I hope that my right hon. Friend will not be too defensive. This matter began before the Commission was created and is simply a case of the old Civil Service Department, now the Management and Personnel Office, responsible for efficiency in government, resisting being charged the costs of what it received.

Mr. Bottomley: I am aware of that. I am suggesting that the House of Commons Commission should not accept the responsibility. However, that is not my final word, because the House of Commons Commission has asked the Officers of the House to look at the proposition and to give their views as to whether it would involve higher costs and probably less efficient service. When the Commission receives that guidance, it will give further consideration to the proposition. I have looked at it carefully and, in my view, it would not improve parliamentary service if we took away from Her Majesty's Stationery Office the responsibility for looking after affairs and for this Estimate.

Mr. Anthony Beaumont-Dark: It is extremely rare for an hon. Member to be able to say sincerely that he agrees with all that has been said so far in a debate. Indeed, it might be rather ominous if anyone did so because that would probably mean that everyone was wrong.
Class VIII, Vote 23 involves a large sum of money. It seems a small sum relative to the other amounts set out in the Estimates. However, to anyone in the business world, £400,000 is a large sum of money, wherever it arises. We should not describe such a sum as peanuts. If it is peanuts, it is an awful lot of peanuts.
The whole flavour of the inquiry is that here was a rather lazy, hazy way of running a business. I can almost hear the clinking of cups and the civilised chat before people trotted off to perform far more important tasks involving decisions about who was to get promoted and

who was not. This sort of procedure is a disgrace. There is no getting away from it. It has been going on since 1969 with a series of civilised chats between perfectly nice people. It is quite disgraceful
We start in 1969. The CSD, or the Post Office, did not like the arrangement. So the talks rumbled on. No agreement was reached. Nothing was done. If anyone is not required to make a profit and his job is not at stake, it is always so much easier to let matters run on. It is so much more civilised to approach them in that way, even if it is so much more costly to the taxpayer.
It took about another three years before the Post Office said "Let us have another little go, shall we?" The Post Office wrote to the CSD expressing its views. At the end of 1973, after many more months had passed, a further working party was set up. The Civil Service seems to set up working parties for the same reason that the Government set up Royal Commissions: it avoids the necessity to make a decision.
Further strong representations were made, though not in the same year and not even the next year but in 1976. I do not know what is meant by "strong representations". I suspect that it refers more to slapped wrists than to writs.
We arrive at 1977, when trials and samples were made. Then another joint working party was set up, not in 1977, 1978 or 1979, but in 1980, and at long last a decision was taken.
As the Select Committee's report points out, it gives cause for grave concern. I usually find that if a business mistake is brought to my attention, especially a small one, and one lifts the stone of that small mistake, there is some larger mistake lurking beneath it.
The Post Office is meant to have on its staff 22 members of accountancy bodies, 14 graduates of accountancy bodies, 50 employees who are undertaking qualifications, and so on. Whoever is responsible for this error must realise that it is not a minor one. It is a major error. No one must be allowed to get away with the idea that £400,000 is a minor matter. One of the great problems when dealing with the affairs of big companies, Government Departments or huge organisations, such as the Post Office, is that an error of this magnitude represents only a very small sum of money as a percentage of the whole. However it is looked at, it is a lot of money.
The Post Office is supposed to have received the accountants' award for its accounts. That says a lot for the people who do the judging.

Mr. English: Was the accountants' award given by Touche Ross, the auditors concerned?

Mr. Beaumont-Dark: I think that it was given by people who themselves had made mistakes in the past, on the basis of Buggins' turn for the award.

Mr. du Cann: I am in a position to help my hon. Friend. There is now an annual competition organised by the Chartered Institute of Public Finance and Accountancy, and thoroughly meritorious it is. Accounts in the public sector are judged for their presentational style. There is no doubt that the Post Office deserved to win an award for its presentational style. However, my hon. Friend is saying that style is not everything.

Mr. Beaumont-Dark: I agree with my right hon. Friend. I have often found that the more glossy the cover, the more horrid the facts inside.
There is no doubt that £400,000 is a comparatively small sum by Government standards. If the House of Commons can show that under the new set-up we can spend one and a half hours of our time considering this issue, I hope that, above all, it will be a shot across the bows of all those who think that, because they are in a state enterprise or a Government Department, they can go on in a lazy, hazy way because there is no fear of the "push". Business efficiency is achieved when people, in the end, are answerable. If they have not a good answer, they go or are penalised. If Government Departments and these great corporations adopted the same attitude, there would be some unhappy people in the short term and some greatly 'more efficient organisations in the long term.

Mr. Richard Shepherd: I wish to lend support to the arguments advanced by my right hon. Friends the Members for Worthing (Mr. Higgins) and Taunton (Mr. du Cann) and the observations of Opposition Members on these Supplementary Estimates. I take up the words of my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) because, in my view, accountability assumes that there shall be some form of demonstrable accountability.
I know that my hon. Friend the Minister has read the Select Committee's report carefully. I shall be interested to hear what measures he has taken to discipline the people involved in this continuing—it is not an odd or irregular occurrence—default of duty.
I draw my hon. Friend's attention to two parts of the Select Committee's report. The first occurred during questions from my right hon. Friend the Member for Worthing. He asked the financial planning officer of the Post Office who were the auditors. He was told that they were Touche Ross. My right hon. Friend's next question was:
Have they offered any explanation as to how it was they did not discover what is now apparent?
Mr. Wilde. representing the Post Office, replied:
Under the original methods for calculating government department postal charges, Touche Ross had been very critical for many years of our methods of raising charges to government departments.
A little later, the hon. Member for Colne Valley (Mr. Wainwright) asked Mr. Wilde:
Have these observations of Touche Ross been incorporated in the auditor's management letter when they report to management on the audit or have they been strictly verbal observations only?
Mr. Wilde replied, with candour:
They have been in the management letters in previous years.
It is not as though one is ignorant. It is not as though one did not have warning that something was very unsatisfactory.
I also draw my hon. Friend's attention to the conclusion of the Select Committee's report:
On the basis of what we have found in examining these two Supplementary Estimates, we feel bound to record our unease about the quality of financial control exercised by the Stationery Office. We note in this context that in two recent Sessions the Committee of Public Accounts, examining on a wider front, have drawn attention to problems with HMSO's management accounting system. The evidence on both Votes also leads us to question the effectiveness of the Treasury in monitoring HMSO's expenditure and performance and in presenting proper Estimates to the House.

Mr. Higgins: Does my hon. Friend agree that although the management letters draw attention over many years to the deficiency in the system, they do not draw attention to the fact that the money has not been collected?

Mr. Shepherd: One is always hesitant to criticise major accounting firms, but the information given by such firms is often inadequate for the proper supervision of companies.
I was speaking about the conclusion of the Treasury and Civil Service Select Committee's report. It is a very damning statement. The Select Committee's observations bear out the anxieties of the Public Accounts Committee. I therefore press my hon. Friend the Minister on the following matters. What disciplinary steps have been taken? Have any officials been reprimanded? If so, has it represented merely a pause hi their careers? Has it interrupted their careers at all? Has the Minister demonstrated the urgency with which he treats what can only be called incompetence and casualness of the first order, and have the officials concerned been reduced in status or standing? If we raise these questions on the Floor of the House, it is important to demonstrate the accountability of our democratic system by taking action at the point where good examples can be set. If the Minister, who, after all, is responsible to this House, cannot carry out injunctions to ensure that his staff and the great bureaucracy down the line who fail in their duties are held accountable, he should suffer the fate that he should insist is meted out to his officials down the line.

Mr. Charles R. Morris: I welcome the opportunity to contribute to this debate, mindful that it is a parliamentary innovation. I am sure that the House as a whole appreciates the actions of the Liaison Committee and the Treasury and Civil Service Select Committee in identifying these two items for consideration.
The right hon. Member for Taunton (Mr. du Cann) was right to preface the debate with the historical background giving hon. Members the authority to analyse financial estimates and bring the Executive to account for the disbursement of public funds. Right hon. and hon. Members of this House have a duty and an obligation to be vigilant in examining expenditure and in eliminating waste. On that basis, I shall consider the two Votes now before us..
Vote 22 refers to the anticipated shortfall of £393,000 to compensate Her Majesty's Stationery Office trading fund for the losses that it would otherwise have sustained through providing public libraries with copies of parliamentary debates and other publications at a discount of 50 per cent. I understand that Ministers wish to examine the options of continuing the discount at 50 per cent. or rethinking and lowering that discount to 40 per cent. However, one cannot justify in any form the manner in which the Estimates were presented on three occasions with precisely the same figure and with no reference to the exercise of options that Ministers were considering. This discount, which is now running at an annual sum of over £1 million, and which, as both sides acknowledge., is demand-related, should be seriously examined. Ministers should explain why, in questions on 8 February, if there was no conspiracy to mislead the House, there was in my view a conscious intention to conceal the fact that there


had been any concern as to whether the matter of the 40 per cent. to 50 per cent. discount on these publications should be re-examined. Ministers should account for that element of concealment.
I shall say a brief word about Vote 23. There are two elements in this additional expenditure—£245,000 for deliveries of Hansard to Members of the other place, and £137,000 for deliveries of Hansard to Members of this House.

Mr. English: Much less.

Mr. Morris: These items reveal that the people who are responsible for financial control in both Her Majesty's Stationery Office and the Post Office entirely failed on two occasions to spot the resulting distortions in their financial accounts. No one expects infallibility of any institution, but for the same mistake to occur on two occasions projects a picture of muddled accountancy and financial incompetence of a rather unusual nature in the public services.
I hope that the Minister will comment on the suggestion of my hon. Friend the Member for Norwich, South (Mr. Garrett) that this expenditure should properly come under the House of Commons Commission. I noted the contribution of a distinguished member of the House of Commons Commission, my right hon. Friend the Member for Middlesbrough (Mr. Bottomley), who was not in favour of such expenditure coming under the House of Commons Commission. In my view, we are talking about a service that is provided for the House, and financially and properly it should come under the Commission. However, I noted my right hon. Friend's comment that Officers of the House are examining that matter.
I was encouraged to learn from the report that the Services Committee is looking critically at the justification for the continuance of this rather expensive service to ensure first-post delivery of the previous day's Hansard. Can we continue to justify that expensive service? All right hon. and hon. Members recognise that the delivery is not as efficient as it was. Communication in this House has improved tremendously, and one is bound to question whether Members of both Houses really need delivery of the previous day's Hansard before 9.30 in the morning. Certainly, it should be done in response to an individual application, if that can be justified, but I question whether the public at large would endorse that expensive provision, bearing in mind that facilities in this House are currently running at £6·5 million.

Mr. English: As it does not happen, and as it is always delivered before 9.30 on the subsequent day, why worry?

Mr. Morris: No doubt my hon. Friend's point will be noted by the Post Office authorities.
I endorse the contribution of the right hon. Member for Worthing (Mr. Higgins), with one reservation. He said that if we vote against the Estimate the Post Office might be able to carry the burden—the right hon. Gentleman shakes his head; perhaps it was my hon. Friend the Member for Nottingham, West (Mr. English). As I understand it, if the House rejects the Supplementary Estimate it will not be the Post Office which has to carry the financial burden but Her Majesty's Stationery Office trading fund, bearing in mind that there has been a

negotiated settlement of the Post Office's claim. In those circumstances I hope that the Minister of State will explain the consequences of a rejection of the Estimate.

Mr. Richard Shepherd: Does the right hon. Gentleman's party, of which he is a disinguished representative, believe that disciplinary action should follow as a consequence of the reports of the Public Accounts Committee and the Treasury and Civil Service Select Committee?

Mr. Morris: Every senior civil servant is adequately paid for the responsibilities that they shoulder and will be subject to the action of their superiors.

The Minister of State, Treasury (Mr. Barney Hayhoe): I am glad to be taking part in what is something of a historic occasion for the House of Commons. For the first time for many years the attention of the House is focused on the details of the Government's expenditure plans as embodied in the Estimates in substance as well as in form. In future, when the Order Paper says that the House is discussing Estimates, that will be exactly what we shall be doing. That has never happened in the 12 to 13 years that I have been in the House and I suspect that not a single hon. Member can remember when that happened.
When we discussed the new Standing Orders last July my right hon. Friend the Member for Worthing (Mr. Higgins) described these changes as a major reassertion of parliamentary power in relation to the Executive. He and I recognise that time will tell whether that proves to be so or not but it is an important step in making the parliamentary procedures for expenditure control more effective. As a House of Commons man I welcome this step although I must confess that I had not expected to find myself on the receiving end of it as a Treasury Minister quite so quickly.
I should like to add my tribute to my right hon. Friend and the members of his Committee on whose work the new procedure is based. It represents a further step in the continuing development of the departmental Select Committees that were established in 1979. Their reports and the developing expertise that underlines them will be important both in selecting the topics for debates on Estimates days and in enhancing the quality of the debate on them. On this occasion the House is much indebted to my right hon. Friend the Member for Taunton (Mr. du Cann) and his Treasury and Civil Service Select Committee as well as to him in his position as Chairman of the Liaison Committee, and to the Chairman and members of the Foreign Affairs Committee for their reports. That is particularly so as those reports had to be produced at short notice because of the inevitable time constraints on the spring Supplementary Estimates. Both the Committee members and the witnesses who appeared before them at short notice are to be commended on what they have done.
In dealing with the specific issues that concern the Stationery Office I want to say a word about the background of its financial regime, which, the House will know, was turned into a trading fund three years ago on 1 April 1980. It now operates on a broadly commercial basis and has no monopoly in its market. Since April 1982 Government Departments have been free to buy supplies


elsewhere if they can strike better bargains by so doing. Her Majesty's Stationery Office has responded well to the challenge of operating commercially. Uneconomic operations have been progressively and resolutely discarded and resource costs have been rigidly controlled to the extent that the staff has been reduced from 6,000 to 4,500 in the past two years.
Her Majesty's Stationery Office trading fund has met its financial targets. In 1981–82, the last full year, on a turnover of £251 million it earned a 7·3 per cent. return on capital in current cost accounting terms. In 1982–83 it is on course for a better result. The House will wish to note those results and commend the management, work force and trade unions on their achievement.

Mr. Beaumont-Dark: Do the figures include the enormous increase in costs of all HMSO publications, in which area it has a monopoly? As a user, I should have thought that any fool could make a profit if he could put his prices up every other week.

Mr. Hayhoe: While that is an important area of HMSO's operations it is by no means a dominant one. HMSO is concerned with making supplies to Government Departments but the increase in costs is as a result of imposing upon it the duty to run itself commercially as a trading fund. The high prices that are charged for small publications are the result of Parliament saying that they must be published. No normal publishing house would produce them, because there is insufficient demand and it is uneconomic to hold them in stock for many years. I can assure my hon. Friend that if he considers the matter carefully he will find that in recent years HMSO has conducted itself in a broadly commercial way, although not entirely so because it remains a public service. Nevertheless, all concerned should be commended.
The House will appreciate that by far the greater part of HMSO operations are financed by the trading fund but the activities covered by this Supplementary Estimate are handled separately. Before the trading fund was established, they were provided by the Stationery Office to Parliament on what was called an allied services basis—they were free of charge to the House of Commons. While other Government Departments now have to pay the trading fund for such services from their Votes, Parliament has remained an exception to that rule. The Stationery Office retains responsibility for the Vote and reimburses the trading fund for the cost of the service to Parliament. The difficulty that is illustrated in the Treasury and Civil Service Select Committee report is related to this Vote and to those arrangements.
The debate has been mainly concerned with Vote 23, the Supplementary Estimate with which we are dealing, but reference has been made to Vote 22, which also formed an important part of the Select Committee's report. Without going into the details of that aspect, looking back over what has happened I am sure that several things should have been done differently. An opportunity should have been taken, perhaps by a written question, to describe the changes that were being made. It was unfortunate that the recent Supplementary Esitmate did not give a full explanation, but I can assure the House that those lessons have now been well learnt and arrangements for meeting the full cost of the discount have been improved. The full extent of the subsidy, while it continues in its present form, will in future be shown on this Vote.
Vote 23 of the Supplementary Estimates covers two points. The largest sum Of money involved is £374,000 that results from payments to the Post Office for the early morning delivery of Hansard to Members of both Houses within the London postal area. The larger amount is a result of the payments that ought to have been made. Of the £374,000, £325,000 is the negotiated sum between the Post Office and HMSO. The VAT liability is £49,000, which becomes payable as soon as these charges are made. The background is set out clearly in the Committee's report.

Mr. Higgins: Should not the amount for value added tax have been accounted to the Customs and Excise a considerable time ago? If the bill had been properly presented and proper payment made, surely the VAT ought to have been paid at that time. It has not been paid only because the bill was not properly presented.

Mr. Hayhoe: My right hon. Friend is right. If the payments had been made, the VAT would have been paid. Since the payments were not made, the VAT was not paid. The invoices were not raised. Under the existing arrangements, records of the weights of material dispatched should have been notified by the Stationery Office to the Post Office, which would then have billed HMSO accordingly. This arrangement went wrong initially when a switch in printing arrangements was raade for the Lords Hansard in 1976. That error continued each year—it was not a discrete error—in that no notification was made of the weights of the material dispatched. When the change in printing arrangements was made in 1981 for the Commons Hansard, the record of the weights was not given. Neither the HMSO nor the Post Office discovered the error at the time. The errors came to light during the course of discussions arising from the changes to public posting methods in 1982, when the Post Office raised the question of the payments it should have received.

Mr. English: The hon. Gentleman is being over-fair to his Department, now known as the Management and Personnel Office, formerly the CSD.

Mr. Hayhoe: I shall deal with that in a moment.

Mr. English: This matter was first raised in 1969.

Mr. Hayhoe: The long delays in establishing public posting methods—those were the discussions that were referred to between the Post Office and the Civil Sevice Department—were concerned not primarily with the way in which payments were made for Hansard but with official paid envelopes being used throughout the Civil Service. Those discussions went on for a considerable time. Although it is linked with the matter the House is debating, it is a somewhat separate issue. The introduction of public posting methods is a subject that ought to be investigated. This state of affairs, as has been said on both sides of the House, continued for a long time. This Government brought it to a conclusion and brought in these methods. They are for the general convenience of all concerned, and improve the, value for money aspects of Government use of those postal services. I express my regret to the House, both as Treasury Minister and as the Minister responsible for the HMSO, for the error that occurred. I assure the House that the necessary corrective action has been taken to ensure that proper invoicing is carried out in future.

Mr. Richard Shepherd: rose—

Mr. Hayhoe: My hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) asked whether any personnel have been subjected to disciplinary action. I presume that he is thinking of the Post Office and HMSO. I do not have that information available. I shall inquire into it and write to my hon. Friend, but I am not responsible for the Post Office.

Mr. Shepherd: Where does my hon. Friend's responsibility lie? In view of the serious reprimand which is expressed in the Treasury Committee's report, and in view of the observations of the right hon. Member for Manchester, Openshaw (Mr. Morris) on behalf of the Opposition, could not my hon. Friend have expressed his position better, having been given some time to reflect on the lessons from this report, as to why disciplinary action has not been set in train? It undermines public confidence in the control of the House over expenditure.

Mr. Hayhoe: My hon. Friend is drawing an unwarranted conclusion. I have not commented as to whether disciplinary action has been set in train. I do not have that information available. I wish to give my hon. Friend correct and adequate information, and that I will do.
My right hon. Friend the Member for Worthing asked about the liability of HMSO to meet these charges, which had not been called for at the appropriate time by the Post Office. The Post Office did not ask for its bills to be paid, so was there a liability? The legal advice that was taken and available from the Treasury solicitor was that the Post Office claim was valid.
For the Stationery Office to be involved in the administrative and financial details of the delivery of Hansard is a curious legacy as it is the concern of the House authorities and the Post Office. A logical case can be made for the House authorities to hold full financial responsibility. I trust this matter will be examined by those principally involved. I noted the interventions by the hon. Member for Norwich, South (Mr. Garrett) and the right hon. Member for Middlesbrough (Mr. Bottomley), who is a distinguished member of the House of Commons Commission. Hon. Members need to re-examine where the precise responsibility should lie.
Questions have been raised about the delays in the delivery of Hansard.

Mr. Higgins: rose—

Mr. Hayhoe: I wish to continue because several points have been raised and I am under a time constraint. The Post Office and HMSO introduced new arrangements last summer to speed up the delivery of Hansard to hon. Members living in the London area. The Committee's proceedings have revealed that these are not working as they should in that some Members are not receiving their Hansard properly.
The agreement between HMSO and the Post Office is quite clear. Provided copies are ready for collection from the Hansard Press by 6.30 am they will be delivered to hon. Members in London numbered postal districts before 9.30 am. A check of the Hansard Press two weeks ago revealed that on 45 out of 46 occasions copies had been ready for collection at 6.30 am. Apart from statements made by hon. Members during the hearing of the evidence, neither the HMSO nor the Post Office had any knowledge that copies were not arriving promptly. The Post Office

has carried out an urgent review of vehicle scheduling. In addition, it is prepared to undertake special individual checks of deliveries to any hon. Member who notifies the Post Office of service failure. The chairman of the Post Office, Mr. Ron Dearing, has intervened to ensure that the delivery arrangements are closely monitored so as to give hon. Members the early morning service in London to which they are entitled.
The second aspect of the Treasury Committee's report referred to a shortfall of £40,000 in the appropriations in aid because of inaccurate estimates of the sales from the House of Commons Sales Office to members of the public. Receipts during the course of the year were well down on what was forecast when the original Estimate was prepared. I apologise for the error. Proper consultation with the staff of the House of Commons Sales Office did not take place. That has now been put right for the future. The informal consultations that took place with the Sales Office staff on the trends of actual receipts during the year will now be formalised and extended to seek information on longer-term trends for Estimate purposes. However, the House will recognise that it is difficult to forecast the extent of parliamentary business and public interest in it, and even the most informed estimate may prove somewhat unreliable. However, the latest advice of House officials is that the outturn for 1982–83 should be very close to the figure in the Supplementary Estimate.
In its conclusion, the Committee recorded its unease about the quality of financial control exercised by the Stationery Office. That issue was referred to in strong terms by my right hon. Friend the Member for Taunton. Undoubtedly, serious mistakes were made, but it is only fair to add that HMSO has made considerable progress in overcoming the inadequacies in its management accounting system, to which the Public Accounts Committee drew attention two years ago. It has been running as a trading fund for only three years. Pressures have been exerted throughout the whole organisation, and the trading fund's circumstances together with the comprehensive and modern planning and control mechanisms that are now in operation will ensure much greater accuracy.
The Committee also questioned the Treasury's scrutiny of the estimate. I accept that more care might have been devoted to the original scrutiny of Main Estimates. However, the figures did not appear unreasonable in the circumstances prevailing and, even with hindsight, there seems to be no clear basis on which they should have been queried by the Treasury. Therefore, I hope that the House will not reject this Supplementary Estimate.

Mr. Charles R. Morris: Can the hon. Gentleman comment on the absence of professionally qualified accountants at HMSO?

Mr. Hayhoe: The arrangements now in place will avoid such difficulty in future. I have tried to explain that when a change was made about the printing in 1976, an error was made that was then carried forward year after year. Given the explanations that I have offered, I hope that the House will approve the Supplementary Estimate. If it does not, the shortfall will have to be borne by the Stationery Office trading fund. Although I have acknowledged that HMSO has made mistakes, others made mistakes too, and it seems unfair that the cost penalty should be placed completely on the trading fund.
I hope that the House will also take account of the difficulties faced by HMSO as a result of the way in which its capital structure was determined, and will remember the sympathetic comments made by the PAC in its 30th report, which was published last November. Given all those factors, I hope that the House will agree to the Estimate. If the House does not approve the Estimate, I am advised that the automatic consequence is that £400,000 or so will have to come out of HMSO's trading fund. In all the circumstances, that is unreasonable. It would be a sharp discouragement to the trade unions, the work force and the management, who have been working well in the new, commercially orientated trading fund regime. Therefore, I hope that the House will agree the Estimate.

Mr. English: On a point of order, Mr. Deputy Speaker. How on earth can a Crown corporation claim against the Crown? If the Post Office does not ask for the money, why should it expect the money to be paid by another Crown corporation?

Mr. Deputy Speaker (Mr. Ernest Armstrong): The Minister has heard the hon. Gentleman's contribution, and I am sure that he will act accordingly.

The debate having continued for one and a half hours, MR. DEPUTY SPEAKER interrupted the proceedings, pursuant to the Resolution [8 March].

Question deferred, pursuant to paragraph (2)(c) of Standing Order No. 18A (Consideration of Estimates).

SUPPLEMENTARY ESTIMATES

Class II, Vote 10, Overseas Aid

Turks and Caicos Islands (Development)

[Relevant document: Foreign Affairs Committee Second Report, Turks and Caicos Islands: Airport Development on Providenciales, House of Cotntnons Paper 112, Session 1982–83.]

The Minister for Overseas Development (Mr. Timothy Raison): I beg to move,
That a further Supplementary sum not exceeding £1,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1983 for expenditure by the Foreign and Commonwealth Office (Overseas Development Administration) on the official United Kingdom aid programme including pensions and allowances in respect of overseas Service, assistance to certain refugee students, grants in aid, certain subscriptions to international organisations and certain payments under the Commonwealth Scholarship and Fellowship plan.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Mr. Speaker has selected the amendment in the name of the hon. Member for Stroud (Sir A. Kershaw). I remind the House that the debate will end at 6.34 pm.

Mr. Raison: I should make it clear to the House that this debate has arisen from the decision of the Liaison Committee in its report of last Thursday, in which it recommended that the debate should be limited to the question of airport development on Providenciales in the Turks and Caicos Islands.
With the permission of the House, I shall respond to the debate at its conclusion.

Sir Anthony Kershaw: I beg to move,
That Class II, Vote 10, be reduced by £500 in respect of Subhead C3(6) (Budgetary aid to Turks and Caicos).
Other hon. Members have called attention to the significance of this debate and have expressed our general thanks to those responsible—the Government and the Committees of the House, in particular those of my right hon. Friends the Members for Taunton (Mr. du Cann) and for Worthing (Mr. Higgins).
To some extent the House is resuming its ancient right to scruntinise expenditure. However, perhaps it is apposite to remark that it has not been all that easy to find subjects to debate. Contrary to olden times, the House usually urges the Government to spend more, not less. However, there are two items before us that involve less expenditure. The hon. Member for Sheffield, Heeley (Mr. Hooley) and I decided to table an amendment and we consulted those who know about such things. We received conflicting advice about whether it would be suitable. However, we tabled it to identify precisely, and if necessary to vote about, this subject. I know that the debate is limited in time, but if it were to come to a Division—I do not say that it will—we would have to vote against the whole Estimate. In general, we do not want to do that and want only to call attention to this item.
I have one quibble with the procedure being followed today. The amendment seeks a token reduction of £500 in the spring Supplementary Estimate for overseas aid, merely because the total Supplementary Estimate sought


by the Government is itself only a token amount of £1,000. This token amount disguises increases in individual provisions in the Vote of more that £149 million, most of which is to be paid for by transfers from the very large unallocated portion of the overseas aid Vote.
This way of presenting the Supplementary Estimates probably has considerable merit in the case of overseas aid, where detailed requirements for aid expenditure may not become clear until the financial year is well under way. But it has made our task more difficult in clearly identifying the reduction in the Estimates which we believe may be justified as a result of our inquiries. Our original wish was to put down an amendment which would seek to reduce subhead C3 of the vote by about £50,000, which would be close to the total sum sought for support for the budget of the Turks and Caicos Islands Government: this would have been preferable to the token sum that we are compelled to propose by the terms of the motion.
Therefore, I urge the Government to find some means in future of presenting their expenditure requirements in such a form as to allow Members and Committees, if they wish, to propose real reductions and not merely token reductions; otherwise we shall find our proceedings under the new system retaining some of the artificiality of the old Supply procedure, which contributed to the collapse of that procedure.
The hon. Member for Heeley, who presides over the Sub-Committee with such distinction, will be able to explain the matter to the House if he catches your eye, Mr. Deputy Speaker. He has the detail of the report much more at his command than has anyone else. However, I shall permit myself some general observations on the report.
It is known that the proposal to help the Turks and Caicos Islands involves the expenditure of about £5 million to put a holiday village into Providenciales, one of the islands in the group. The village is to be built by the Club Mediterranee.
The Turks and Caicos Islands, with a population of 7,500, have—or had—two basic industries. One is salt, which has been rather superseded by other methods, and the other is fish. For some time, it has been received wisdom in Government circles that it would be very easy to overfish the resources there. I know that some reports are rather more optimistic, but I do not think that the fishing industry there can be pursued too far with advantage. If that is so, the only other resource that the Turks and Caicos Islands have—they share it with many other places in that part of the world—is sun, sea and sand. Therefore, one's mind obviously turns to tourism.
Experience has shown that tourism must have certain characteristics before it is of real value to the place concerned. It must not place too great demands upon the infrastructure of the island or the locality. It must use, as far as is possible, local resources such as agriculture and food. It must not be too conspicuously different from local conditions and the level of life. When poor people see rich foreigners driving about in expensive cars, they do not relish what they see, and envy is aroused.
Tourism must not be too big for the area in which it is to be developed. It must not overwhelm the area in size or volume of activity. It must provide employment for local people; otherwise there is hardly any reason for it

from their point of view. It must provide revenue for the Government 0f the country concerned. I am afraid that the scheme before the House failed on all those grounds.
I was rather appalled when I saw the Sub-Committee's report. It showed that the financial estimates had in some cases been hundreds of per cent. out. Only one estimate was near the original one. Some information had been withheld. Expert information had not been made available to those who had to take decisions.
In particular, the Club Mediterranee had undertaken by contract to be in operation by the end of 1982. So far, nothing whatever has been built and there is no sign of any activity. The new international airport is very nearly completed and the roads are there, but there is no sign of the Club Mediterranee. Therefore, the proposed development has been badly planned and badly executed, and the House ought to have its attention drawn to what is proposed.

Mr. Frank Hooley: I am much obliged to the hon. Member for Stroud, (Sir A. Kershaw) for the terms in which he has moved the amendment. I am glad that we have an opportunity, under the new procedure, to debate the issue, which is very important in general developmental terms, quite apart from the specific things that have gone wrong.
As the hon. Gentleman said, the Turks and Caicos Islands are a small group of islands in the Caribbean, with a population of about 7,500 people. They already enjoy the benefit of two international airports. In 1980, the Overseas Development Administration came to the astonishing conclusion that a third airport was necessary. It proposed to put it on the tiny island of Providenciales, which has fewer than 1,000 people living there, and on which at that time—the position is probably the same today—there was no unemployment; in fact, according to the evidence to the Select Committee, there was a labour shortage.
Why did the ODA come to the astonishing decision to attract a multinational company, Club Mediterranee, which said that it was ready to build a tourist centre—it called it a vacation village—that would house more tourists than the total adult population of the island on which it was to be built? What exactly was the origin of that peculiar decision? According to the evidence given to the Committee, it was
in response to an approach by private developers resident on Providenciales and a request by the Turks and Caicos Islands Government.
It was in response to an approach by private developers that the Club Mediterranee came to that little island in the West Indies. The House is entitled to know a little more about who those private developers were and what their motives were. At any rate, that was the reason why the representative of the Club Mediterranee went to Providenciales in June 1979 to survey the ground for its vacation village.
The club decided that it would build the vacation village on the following conditions: that an international airport be built from public funds; that an access road be built between the vacation village and the airport from public funds; that there be a supply of electricity and water for the village from public funds—although that was slightly modified later. The next requirement was that the club be granted exemption from all taxes on profits, gains


or turnover, property tax, capital levies or other capital taxes for 20 years. That was an astonishing proposition, even though we know that tax-free regimes abound in the Caribbean area.
To be fair to the Turks and Caicos Government, who were partly involved in, but not solely responsible for, the negotiations, they pointed out to Club Mediterranee that the island already possessed two international airports. They suggested to the multinational company "Certainly, we would welcome your activities, but why not go where an airport already exists?" The club replied that it was not interested in that proposal, that the village must be built on Providenciales, that a third airport must be built, and that the club would not finance it. The club asked that it be financed out of public funds. I think that the club assumed at the time that the public funds might come from the European development fund, as a possible alternative to the British taxpayer financing it. The club had the option of going elsewhere; it refused it, and insisted upon going to that tiny island. It also insisted on an extraordinary expenditure of public funds to enable it to do so.

Sir Neil Marten: For the record, it should be said that it was an extension to an existing airfield.

Mr. Hooley: The existing airport was a very tiny facility, which could take only light aircraft. The club wanted an airport of international calibre, capable of taking large jets, carrying 200 or perhaps 300 tourists at a time. It cannot be contended that such an airport already existed. This was a major operation, at a cost of about £5 million, from public money.
What is truly astonishing is not that the company made these demands—that is not surprising if it thought that it could get away with them—but that the Foreign and Commonwealth Office accepted them. The Foreign and Commonwealth Office undertook to build the airport and the access roads, to provide the water and electricity and to give the tax concessions that are built into the agreement that was eventually made, despite the fact that there was no proper tourist development policy for the islands, no proper development of alternatives such as fisheries, and no balanced development strategy for the islands. Yet the Foreign and Commonwealth Office was prepared to accept the proposition that £5 million of public money should be put into this tiny community for the benefit of a multinational company which wanted to develop tourism for its own benefit.
In some ways a more disagreeable aspect of the matter was the internal faultiness of the procedures in the Ministry itself. Figures produced by independent consultants who had gone out to Providenciales to study the position on the ground and had produced careful calculations of the recurrent and capital costs of the scheme were never presented either to the Minister when the decision came to be made or to the committee within the Overseas Development Administration.
I shall quote from the Select Committee report of July 1981, as the internal administration of the ODA is an important issue. It says:
Not only was the decision by the ODA to reduce the consultants' estimates of social infrastructure by over two-thirds not mentioned in the Project Committee submission: it was not known to senior FCO/ODA officials responsible for the project. It was not even clear to the Senior Economic Adviser when he first appeared before the Sub-Committee to give evidence … It was only when the Sub-Committee asked for a detailed breakdown of the economic and financial analysis of the project

that it became clear that the capital and recurrent costs which were actually used by ODA in the economic and financial appraisal were about one-third of the level of the consultants' estimates.
In other words, someone within the ODA deliberately fiddled the figures to persuade the relevant committee and the Minister to embark on a project which could not give any real financial return. In case anyone says that I am exaggerating, I must say in all honesty that the right hon. Member for Banbury (Sir N. Marten), who was Minister at the time, formally apologised to the Select Committee for the fact that misleading figures had been given. It says something when a senior official at the Department appeared before the Select Committee and gave the wrong set of figures without even knowing at the time that they were the wrong set of figures.
The agreement was duly signed on 5 February 1980. The multinational company undertook that the vacation village should be operating not later than 31 December 1982. In fact, not a stone has been put on another stone, not a single sod has been turned—nothing whatever has been done by that multinational company to build the village to which it was by contract committed three years ago on 5 February 1980. By contrast, £5 million of British taxpayers' money has been committed to the airport and to other facilities. Thirteen million dollars worth of property speculation, arising from the existence of the airport, is now in progress on Providenciales. Wide open opportunities for a dangerous and profitable drug trade arise out of the existence of another international airport in those tiny islands. When the officials originally gave evidence to the Select Committee, they admitted the danger of the drug traffic but seemed to have discounted it in agreeing to this project.
In addition, revenue commitments on the aid programme arise from the project. The greatest irony of all is that the Government intended to bring private enterprise into this exercise, particularly so that the budgetary deficit of the Turks and Caicos Islands should be reduced. In fact, that deficit has increased.
In the short space of time that is available, I will not pursue the matter further except to ask the Minister some questions. Who is making the profits on this exercise? What steps are being taken by the Turks and Caicos Islands Government to tax those profits and to introduce some special windfall taxes on the property gains on the speculation that is taking place? Is there any evidence of corruption within the Turks and Caicos Islands Administration? Who made the original approaches? Who was in cahoots with the Club Mediterranee? Why has not the company raised a finger to meet its obligations under a formal legal agreement? What is happening about the control of drug trafficking, and how much will it cost the Turks and Caicos Islands Government to bring the problem, which the existence of the airport will aggravate, under control?
What reason have we now to trust Club Mediterranee to fulfil any engagement it may make to make good its breach of agreement? What steps is the Foreign and Commonwealth Office taking to ensure that, in any future agreement involving aid money, there will be a sufficiently powerful sanction against any breach of that agreement if it is made with a multinational company? What is being done to tighten up the internal administration of the ODA to ensure that when projects are approved not only is the Minister told what the Foreign and


Commonwealth officials think the financial calculations are, but he is told in clear and unequivocal terms what any independent consultants have said about the nature and cost of such a project?

Mr. Christopher Brocklebank-Fowler: rose—

Mr. Hooley: It is a short debate and I have virtually finished my speech.
This is not an academic exercise. We know that the airport is virtually complete and that it cannot be dissolved or wished away, but I must remind the House that, in another group of islands 8,000 miles away, there is talk of building other airports and of expending huge sums of ODA money on certain facilities for a population that is tinier even than that of the Turks and Caicos Islands. Before we embark on such projects in that part of the world, much less get involved further in the Turks and Caicos, we need some clear and firm assurances from the Minister that he has proper control of what is going on with the British aid programme.

Mr. Bowen Wells: If the position was as has been outlined by the hon. Member for Sheffield, Heeley (Mr. Hooley) and even by my hon. Friend the Member for Stroud (Sir A. Kershaw), I, too, would be highly critical of what has happened in the Turks and Caicos Islands, but the original report of the Select Committee is very misleading and its subsequent report, which I thought was the principal subject of our debate tonight, arises because of the failure of the Club Mediterranee to conclude and live up to the contract entered into between it and the Government. It is ironic that that second report should be the subject of criticism by the Select Committee because the issue was born of the Select Committee's great prejudice against tourist development as a means of developing overseas countries. It was and still is reluctant to support tourist development even in circumstances where islands such as the Turks and Caicos have only sun, sea and sand to offer as basic materials from which to produce development. It is ironic that the second report criticises the Government and the Club Mediterranee for not having produced the tourist development that it originally criticised.
It is regrettable that Club Mediterranee has not built the tourist village with 650 beds. That would have been the start of tourist development in the Turks and Caicos Islands. The islands have wished to start development for the past 25 years, but could not find a developer willing to undertake the project. When Club Mediterranee proposed the development on Providenciales, the Government of the islands and the ODA grabbed the opportunity. The project had much greater appeal than simply the start of a tourist industry. Club Mediterranee offered the islanders the ability to market the islands through its framework of tourist promotion. Therefore, the islands did not need their own expensive tourist development and advertising campaign. The hotel beds would have been filled by Club Mediterranee, and the Government of the islands would not have had to be involved.
It is a great problem to fill hotel beds in the initial years of a tourist development. It is a major problem obtaining

adequate air services to service the development. The building of an international airport on Providenciales, capable of accepting charter flights direct from the sources of tourism, meant that Club Mediterranee could fill the hotel bedrooms immediately and have a profitable and viable proposition.
Club Mediterranee has developed similar projects in other places, notably in the Bahamas, which is close to the Turks and Caicos Islands, where it has two successful villages. One result of successful development is to attract other hotel developers and other tourism. There is evidence that that is already happening in the islands. The Minister told the Select Committee that a $13·5 million development was taking place on the islands because of the new international airport. There is much evidence to suggest that Club Mediterranee is a good pump primer for tourist development.
We would have been right to support the ODA in bringing about tourist development in the islands because it would provide the means by which the islands could at least pay for their current expenditure. They are dependent on the United Kingdom Treasury to make good any shortfall on their current expenditure. The Government are asking for an increase in that figure to offset the effect of not having Club Mediterranee attracting tourists and actively filling hotel beds on Providenciales.
The project is a vital development for the islands. The alternative of the fishing industry can be discounted because it has reached the end of its possible development. There would need to be a change to scale fishing, of which there is no experience in the islands and little prospect of finding an adequate market. The island used to depend on the salt industry, but that is now judged to be uneconomic. Agriculture is extremely difficult because the islands are short of water, and what they have is unpredictable. Agricultural production of a cash crop is difficult to promote.
The ODA has some experience of promoting projects on the islands—for example, on Elenthera in the early 1950s with the development of pineapple growing. Although it appeared to be viable on the surface, the ODA discounted the number of rocks in the land, on which pineapples cannot grow. The result was a disastrously unviable pineapple production.
I do not believe that there is an alternative to tourism for the islands. In addition, the social implications of the development of tourism by such a company as Club Mediterranee will be contained within the village, as will all the related activities. Therefore, there will be a limited impact on the community as a whole, which is a point in favour of a Club Mediterranee-type development.
The hon. Member for Heeley suggested that the ODA had changed the figures disastrously and misled the Minister. He did not take into account—nor did he tell the House—that the estimates were reduced because the nature of the project changed from the time of the consultants' report and the time when the project was put to the Minister. The proposal to build a secondary school on Providenciales was eleminated because all secondary education takes place on other islands, usually on Grand Turk. A viable secondary school population was not likely to develop in Providenciales. The necessity for police and customs stations were equally reduced in scope. That is the principal explanation for the reduction in estimates.
There are some internal procedures that the ODA agrees need tightening. If the House reads the original report it


will be satisfied that the ODA has now done so. If we refuse to develop the potential of islands that are dependent on the United Kingdom, despite the heavy expenditure per head, we are not fulfilling our duty. The islands are the neighbours of the Bahamas, which has been successfully developed, mainly through tourism and other related activities.
If the islands are left undeveloped, like any vacuum they invite the intrusion of other powers. It will not have escaped the attention of the House that the islands are close to Cuba, which might wish to promote similar activity to that which occurred in the Falkland Islands between Argentina and ourselves. A large factor in that hostility was the fact that the Falkland Islands had not been developed. The attendant territories of the British Crown should be properly developed. They should have the opportunity of a viable economic existence.
What has been happening with tourism in the Caribbean? Barbados has a significant tourist industry, which accounts for more than 50 per cent. of its gross national income, yet the number of tourists arriving in Barbados has fallen. There were 370,000 in 1979, 369,000 in 1980 and 352,000 in 1981. The Bahamas is not so well blessed with agricultural potential as Barbados, and its tourist development has been much greater and of longer duration. Even so, its tourist figures are dropping—from 1,130,000 in 1979 to 1,020,000 in 1981.
The fall in tourist arrivals in the large and earlier developed areas in the Caribbean is, perhaps, the reason why Club Mediterranee did not proceed with the development on Providenciales. That is perfectly understandable. The Minister has given an undertaking that the Government will take action under clause 16 of the agreement to force Club Mediterranee to abide by the contract or to make compensation. It is not acceptable that Club Mediterranee has not renegotiated a definite undertaking to build the holiday village. It is right that that should be brought to the attention of the House. Similarly, it is right that the Minister's undertaking should be brought to its notice.
It is the problem of attracting enough tourists to the holiday village in Providenciales to make it viable that lies behind the non-performance of Club Mediterranee. However, it is a fine development. It is the only development on the island that is capable of sustaining income to the Treasury. There is much evidence that the development financed by the ODA will prime the pump, provide an income for the island and provide a valuable source of employment for the other islands in the Turks and Caicos group.

Several Hon. Members: rose—

Mr. Deputy Speaker: I hope that it will help the House to know that the Front Bench spokesmen hope to catch my eye at 10 minutes past six.

Mr. Christopher Brocklebank-Fowler: I am grateful for the opportunity to discuss this important matter. I speak as a member of the Select Committee on Overseas Development and the Sub-Committee of the Foreign Affairs Committee at the time of the first report in 1981. I have since left the Select Committee, but I have watched with great interest the work that has been done by the hon. Member for Sheffield, Heeley (Mr. Hooley) and his colleagues.
We should start by asking "What was the problem on the Turks and Caicos Islands that led the Government to contemplate such major public expenditure?" Having examined the issue and read the subsequent reports, it seems that there were two problems. It appears that the islands were in receipt of budgetary aid over a lengthy period. Secondly, there were high levels of unemployment in parts of the Turks and. Caicos group.
The Financial Secretary to the Treasury, in reply to a question that I put to him when the Select Committee was sitting on 13 January 1981, said:
The level of budgetary aid, as opposed to capital or technical co-operation, has risen to an annual total of about £1 million a year in past years.
In subsequent questioning by the hon. Member for Heeley, the Minister gave the figures for three representative years. He referred to £219,000 in 1970 and said that that aid, in the form of technical co-operation, was £29,000. Budgetary aid was £298,000. The figures were considerable over the 10 years between 1970 and 1980 and there were variations between the lowest figure of £298,000 and the peak of £1 million. It appears from the Select Committee's latest report that there was no budgetary aid in 1980–81 but there was £900,000 in 1981–82 and £1·2 million in 1982–83.
The Government were concerned about the consequent outflow of public funds to support a relatively small group of islands, important though they are to Britain. They wished, understandably, to help the islands become self-sufficient. They concluded, as early as 1971, that there was general agreement that tourism was the right way forward. The House can probably accept that much.
The hon. Member for Stroud (Sir A. Kershaw) worried me when he talked about sun, sea and sand. All of us who know about tourist development in many developing countries know and worry about the fourth "s"—sex—which has brought grave social problems to many developing countries which have gone in for mass package tourism.
Unemployment on Providenciales was only 3 per cent. It suffered from virtually no unemployment, whereas on other islands, such as Salt Cay and Middle Caicos, unemployment is as high as 81 per cent. It is 81 per cent. on Salt Cay and 68 per cent. on Middle Caicos. If the Government had concluded that tourism was the right way to help the island develop—part of the development was designed to reduce unemployment—why did they choose Providenciales for the development?
Are the Government correct in saying that the only form of tourism that can establish a base for the Turks and Caicos Islands economy is that of mass package tourism, which will require a brand new airport of the sort that the British taxpayer is now being asked to finance?
Those were the problems, and it seems that the Government have signally failed to arrive at the right solution over about 10 years. Having now committed themselves to the expenditure of a large sum of public money to develop an airport in the wrong place to resolve unemployment that does not exist on the island that they have chosen, I am concerned that, even if they are successful in concluding a contract with Club Med, they will distort the balance of the islands and create immense social problems.
I am concerned that the Government will not resolve unemployment on the islands without causing major immigration to Providenciales, which would undoubtedly


upset the islanders. I share the concern of the hon. Member for Heeley at the lackadaisical manner in which the scheme has been brought forward. I share the concern of the House and that of the taxpayer that such a huge sum has been spent on so few with such little effect at this stage.
I hope that, as a result of the debate, the ODA and the Foreign Office will examine carefully any plans for expenditure of such a size before they enter into agreements in future. I hope that the ODA has learnt a lesson. I hope also that in future the sparse aid funds that the Government make available will be utilised with considerable attention to the quality of projects and devoted to sound development plans which will not cause problems in the recipient countries. In that form they can make a major contribution to improving the economies of developing countries.

Mr. Robert Banks: Like others in the House tonight, I welcome this debate. I think that it is a great strength of the work of the Select Committee that we have this opportunity to air the report—in fact, there are two reports. But many times reports are compiled—and a great deal of work goes into them—and they are not read by very many people. I believe that these debates will be noted by a greater number of people than would otherwise be the case.
There are two points that I specifically would like to refer to. In the first place, it is the actual way in which this project has been managed. At the outset the agreement was that the airport would be built and that at the same time Club Med would go ahead and develop its holiday village—one dependent on the other. Yet the airport has been built and yet not one single piece of work has been done towards the construction of the Club Med village. Therefore, one has to look at the way in which an agreement was drawn up whereby it was possible for the costly development of an airport to proceed step by step without recourse to any recrimination on the part of the Government towards Club Med for not going ahead with its part of the development. Nearly three years after the original agreement was signed, we are still waiting to see what the Club Mediterranee organisation will do. That teaches a lesson that I hope will be understood.
My second point deals with the legal agreement. These matters are often left to lawyers to deal with. When something goes wrong, one reaches for the legal agreement, reads it and tries to understand it. The chances are that it is not understood and another set of lawyers has to be employed to interpret what the agreement set out originally to do. This is such a case.
Appendix 1 deals with the first question relating to the rights of the Turks and Caicos Government under the agreement. The report considers that the legal position is complex. The legal complexity arose because the Government who drew up the agreement in conjunction with the Turks and Caicos Islands and Club Mediterranee reached a bad agreement. I believe that there is a lawyer sitting in an office somewhere who deserves the sack over this. He pitched us into this problem. The matter should be easily understood by consulting the document. It should not be necessary to go to counsel or other advisers to be

told what the agreement enables the Government to do. We hope that Club Mediterranee will decide to go ahead with the agreement by 31 March, which is its deadline.
The airport exists and although there is no Club Mediterranee development as yet, as my hon. Friend the Member for Hertford and Stevenage (Mr. Wells) has pointed out, other developments have taken place. Developments worth $13 million are going ahead. Why is it that, when other people have the confidence to build hotels and do other things, Club Mediterranee has not gone ahead? That is the point that must be brought home. It should have been clear some little while ago that Club Mediterranee never intended to go ahead with the development. We shall know that soon enough.
I hope that the Committee's recommendations, which seek to ensure that Club Mediterranee does not benefit from selling the land for some other development if it decides not to go ahead with this project, will be accepted. It would be entirely wrong if the company benefited. We have been let down badly by the company. The construction of the airport has gone ahead and has produced some developments in the island. That may be the silver lining, because much of that development was not envisaged when the island originally negotiated for the airport. I believe that the development will benefit the island.
One can only draw upon one's experience of having visited other places and having seen the effect of tourism there to judge what the effects will be. Altogether, I do not believe that the picture is as bad as some people paint. Each island must decide for itself. I cannot say whether these developments will be good or bad. It depends so much on the mentality and attitude of the people and what they want. It is a critical report. Many people should read it and learn its lessons.

Mr. Nigel Spearing: My remarks will be short and the excellent Hansard reporters will no doubt punctuate them properly.
We are discussing a Supplementary Estimate of £1,000. The hon. Member for Stroud (Sir A. Kershaw) and my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) have moved a reduction of £500. The most appropriate outcome might be for the Minister to accept the amendment in view of the sums involved and the criticisms that have been made.
The hon. Member for Harrogate (Mr. Banks) said that $13 million had already been spent and asked why the Turks and Caicos development could not go ahead. I asked the Minister that on 9 December 1982. He said that the money was probably being used on extensions to hotels, and other matters, but I do not find that answer acceptable. In the Committee's first report of 1 July 1981 we said that it had become evident that the Foreign and Commonwealth Office had not carried out a proper survey of the benefits to the islands.
I asked the responsible official about salt. It is clear that the islands could produce up to one million tonnes of salt, but the problem is transport. Until now a port has always been costed on the assumption that 70,000-tonne bulk carriers would be used. Why is it not costed for bulk carriers of 20,000 tonnes or less? The official said that the matter would be studied. I hope that the Minister can tell me that it has been studied and what the answer is.
I come now to the important subject of land speculation. My hon. Friend the Member for Heeley asked which firms were involved. The report makes it clear that the company involved is Grace Bay Ltd., which is a subsidiary of Provident Ltd.—an American firm. I believe that it acquired Crown land because the site of the village was Crown land until 1969. That subject is mentioned on page 31 of the Committee's last report. The value of any land can be increased by suggesting that it is to be developed. Whether it is is another matter.
The Committee did not know about the report, commissioned by the Turks and Caicos Government through the ODA, of Mr. Percy Selwyn of the Institute of Development Studies, at the university of Sussex. That report was published in November 1981. Paragraph 2.18, on tourism, said:
It may, however, be suspected that some of the more grandiose projects which have been submitted—for large hotels, casinos and other facilities—are not genuine, and that the promoters are concerned more with land speculation than with the development of the tourist industry.
That report was written long before we knew that Club Mediterranee was not going ahead with this scheme. The hon. Member for Hertford and Stevenage (Mr. Wells) said that it was a fine scheme. Alas, it is not a fine scheme, and it has not been built.
The figures are serious because they and the changes to them were large. Appendix 2 to the Committee's first report, on page 113, made it clear that the consultant had said that the police buildings would have to cost $1,040,000. After consultations with the ODA, the figure was reduced to $100,000. The consultant said that the police revenue costs would be $385,000. The ODA reduced that figure to $50,000—one-seventh of the revenue costs. These figures were not given to the Minister. I believe that we are justified in asking why the figures were changed to that extent when it is known that the island has a drug problem which would be much bigger once the airport and the village were built. When we said that in future such changes should be reported, we were given a typical reply which would be worthy of "Yes, Minister." The Minister's reply in paragraph 13 accepts the principle that the changes should be set out clearly.
Paragraph 14 states:
'before their Report is finally presented, ODA officials should not discuss with consultants the details of the consultants' findings, nor their consequences for ODA action, before their report is submitted to the ODA'.
The ODA replied that that recommendation was unacceptable. It stated:
Discussions with consultants are an important and valuable part of the process of ensuring that projects are well designed and often result in the removal of misunderstandings and the heightening of the value of the Report without in any way prejudicing the independent judgment of consultants.
I do not believe that that is true. The Government's attitude was an invitation to corruption. If consultants are asked to give figures, they are bound up with the reputation of the consultants, and it would be intolerable if, before the Minister saw the figures, ODA officials could discuss them with the consultants and change them without letting the Minister know.
It is clear that the decision was political, not developmental. In Committee, the Financial Secretary to the Treasury told me:
but in general it was a political decision to go ahead based on the over-riding political need to do something which actually worked and to provide jobs and income for these people.

In other words, if there was a bit of hanky-panky with the figures, it was done to fit the developmental aspect to the political situation. It is clear that a political decision was taken by the Financial Secretary, not by the ODA.
The drug trade on the islands has been mentioned in colour supplement articles. How do the profits of the drug trade compare with the income of the Turks and Caicos Government? Is it not a fact that, being situated halfway between Colombia and the United States mainland, the islands are an ideal place for the transfer of drugs? Will not the drugs trade be a. serious problem?
We must look at the future of our smaller dependencies, pending their internationalisation, which might be a possibility. Can the House stand by while dependencies of this size, and perhaps some territories that will become independent soon, are subjected to such risks? Can we look on while the Union Jack flies over islands facing such problems? I suggest that we cannot.
The Foreign and Commonwealth Office ought to look again at its administration of former colonial territories. We have had a problem in the south Atlantic and we face another in the Caribbean. We need to review what is left of our old Colonial Office, because it is clear that things have not worked out well in at least two groups of islands.

Mr. Anthony Nelson: I shall be brief, because a number of more important contributions are to be made. I pay tribute to those who produced the reports and to the members of the Committee that has enabled us to debate the reports.
The significance of the debate lies not so much in the issue before us as in the influence that it may have over the administration of other matters. The fact that we can debate such issues and look at the detailed reports of Select Committees is of great significance. I did not serve on the Select Committee, but I have read its report. It is important that members of Select Committees should know that other hon. Members are interested in their work.
If the facts that we are debating had been suggested for inclusion in the programme "Yes, Minister", the copy would have been rejected as being too implausible. It is remarkable that we should have built £5 million international airport for islands with fewer than 1,000 inhabitants and where there is no major tourist development.
However, we place much reliance on the understanding that we have gained from my right hon. Friend the Minister that, if the contractual arrangements are not complied with by the end of this month, they will be legally enforceable.
I join my hon. Friend the Member for Harrogate (Mr. Banks) in asking which lawyer was involved. If the legal agreement was neither intelligible nor enforceable, a head ought to roll. We look to Ministers not to gloss over such matters but to give the House the assurance that proper action will be taken.
I did not know that there were such things as bed taxes. Reference was made to bringing sex to the islands. I hope that the House will not think that I am responding to that, but I was surprised to see that the British Government appear to have taken on themselves the role of negotiator, on behalf of Club Mediterranee, with the Turks and Caicos Government for a bed tax of 50 cents a night for the next five years and, in perpetuity thereafter, at 50 per cent. below the going rate elsewhere on the islands.
That was remarkable for two reasons. I have no idea how long Club Mediterranee customers spend in bed, but, however long it is, there is surely a strong case for them to pay the full rate that applies in the islands and elsewhere in the Caribbean. Secondly, a large part of the rationale for such subventions is to assist the Governments involved to obtain hard currency that they would not otherwise obtain. What right do the British Government have to start negotiating lower rates? If we are trying to reinforce the economies of those countries, that is surely a spurious line of negotiation.
In any case, the arguments for capital investment in a holiday project would not seem to be determined by a current cost element such as a bed tax. I hope that my right hon. Friend will refer to that aspect.
I am grateful for the opportunity to take part in the debate, and I hope that there will be other such opportunities to look at cases where there appears to be, if not maladministration, at least a suggestion that things could have been better managed.

Mr. Eric Deakins: Like the hon. Member for Hertford and Stevenage (Mr. Wells), I am a former member of the Foreign Affairs Committee. I was present for its first investigation but not for the second. The House needs to be made aware of the peculiar relationship between the British Government and the colonial Government of the Turks and Caicos Islands. It is not clear who was responsible at any point in this long saga. We are told that some initiatives came from the Turks and Caicos Government and that some important negotiations were undertaken by the British Government on behalf of the Turks and Caicos Government.
The Government of a dependent territory, such as the Turks and Caicos, consist of part-time politicians who, in their capacity as Ministers or members of the legislative and executive councils of that territory, are allowed to have business interests, provided that they do not conflict with their duties.
It appears that some dubious business deals have taken place. We must ask what assurance we have that at least some members of the Turks and Caicos Government are not involved in the speculation and business ventures that have taken place as a result of decisions taken by the British and Turks and Caicos Governments. I suspect that we have no such assurances.
I hope that the Minster will be circumspect in his reply. The debate is not the end of the matter. We await with interest the outcome of the legal case against Club Mediterranee, either for specific performance, which is unlikely, or for compensation. The basis of that compensation will make interesting international law.
I do not know whether we shall be able to reclaim the whole cost of the airport, which would not have been built but for the agreement with Club Mediterranee, but, if we take legal action and there is no specific performance and the compensation is patently inadequate, there will be a case for a public inquiry into the whole affair, including what has been going on in the Turks and Caicos Islands from the time that Club Mediterranee first made its approach.
The Minister is new to this matter. I am sure that, like his predecessor the right hon. Member for Banbury (Sir N.

Marten)—who I know wants to speak in the debate if there is time—he will be careful in what he says. I hope that by the end of the debate we shall have given the Minister some guidance on how the House is likely to react if the suspicions of some hon. Members are not allayed by the final outcome of the affair.

Sir Neil Marten: I realise that the Front Bench spokesmen want to reply at 6.10 pm. I want to make the point that every overseas development operation carries a greater or lesser degree of risk. The Select Committee could, by nit-picking, find out all sorts of things about almost any project—even whether the project had succeeded or failed. I hope that in his reply my right hon. Friend will tell us the exact position. If the contract is finally made with the contractors to put up the Club Mediterranee, I believe that it will be a great advantage to the Turks and Caicos Islands and to their Government. We want to enable such countries to stand on their own feet. The airport might well lead to much more development on the island of Providenciales, to the great benefit of the Turks and Caicos islanders. It might eventually enable them to stand on their own feet without any more aid.

Mr. John Sever: We are grateful that the new procedures have enabled us to hold this debate. We are also grateful to the hon. Member for Stroud (Sir A. Kershaw) and my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) for tabling an amendment that has promoted an interesting and worthwhile debate.
I have been asked by my hon. Friend the Member for Greenwich (Mr. Barnett) to offer the Minister his apologies for his absence. As the Minister may know, my hon. Friend is abroad.
The scheme that we are considering is at best ill-conceived and at worst scandalous. If we regard it in its worst light—and I think that is is justifiable to do so—we see that a proposition was put to the British Government and accepted by them which should by now have resulted in an airport and a tourist development. However, there is no tourist development. Hon. Gentlemen seem to have forgotten that there is an agreement that should have resulted in a substantial tourist development being provided by a multinational company on the island of Providenciales, but the development is not there.
Many hon. Members have referred to the various problems and difficulties identified in the recent Select Committee report, which contains about a dozen conclusions. They present a picture of a Government Department that is not working efficiently and that has presided over and participated in a scheme which is, by any reasonable standard, dreadful. Comparing the airport complex with what might have been provided in other areas of our overseas development programme for the same amount of money, we who are concerned about overseas development are right to be worried about the way in which the Department is run. I accept that the present Minister of State has not been involved with the issue for long, but his duty is to respond to the many valid and reasoned questions put to him.
My hon. Friend the Member for Heeley referred to the two local international airports. I am surprised that we should be involved in a scheme to give £5 million of


British taxpayers' money to provide a third airport of international standards for a community of about 1,000 people. I wish that it had been so simple to find the money for the development of Birmingham's international airport. Instead, we had to argue for years with successive Governments the reasonable case for an international airport for a conurbation serving about 4 million people in the heart of a major industrial centre. If that scheme had gone through so simply, we should have rejoiced in the west midlands long ago.
The proposed scheme involves taking thousands of happy tourists to the island. When they arrive there will be nothing for them to do, except perhaps become involved in the mysterious developments about which we have heard from shadowy developers who have acquired $13 million for development projects. The hon. Member for Hertford and Stevenage (Mr. Wells) said that the Club Med village was not yet established but that there were other developments. Later the hon. Gentleman said that development on the island would be confined to the village complex. Neither he nor the Minister can have it both ways. Either there is a major village complex to accommodate the tourists or other major developments are taking place at the same time, none of which we know much about.
I hope that the overseas development agencies and the Foreign Office know something about the other developments, but in view of their record I would not put money on it. Perhaps the Minister can explain what other developments are taking place and whether they are promoted by the same people who promoted the ill-fated scheme that we are discussing. The House will be interested in any information about that.
Hon. Members who usually argue about overseas development in a slightly different context believe that if the Government cannot find schemes that are more satisfactory and acceptable to the House they should have a thorough rethink about the whole of their development and aid programme.
I do not know how many people could be provided for in other, more sensible and attractive schemes for the same amount of money being disbursed by the Department for the scheme in Providenciales, but moneys voted by the House to the Department should primarily be for the development of Third world countries, for the advance-ment of people who are disadvantaged in the extreme and for countries with starving populations and little or no local infrastructure with which to promote their own interests. Many inside and outside the House believe that it is scandalous that so much money should be spent on a scheme which is so ill-conceived and so badly managed by the Department.
I hope that the Minister accepts that the House should have the fullest responses to the questions and conclusions in the Select Committee report. It contains a dozen or so conclusions, none of which reflect too well on the Department's work. At the simplest level we can argue that the Minister is obliged to provide the House, now or later, with the fullest responses to the Select Committee's observations.
A great deal of work has been done by hon. Members serving on the Committee to bring to the attention of the House the shortcomings and failures of the Department. The scheme itself is now approaching some sort of crisis. As has already been made known, it appears that by 31 March, if a satisfactory solution is not found to the

problem, the Minister. presumably Club Med and presumably the Turks and Caicos Islands Government will have to start all over again to prepare a feasible and workable scheme. I am sure that the House would be reluctant to be told that this is likely. However, it appears that between now and 31 March the Minister has a great deal of work to do if he is to pull out of the fire a scheme that is already well burnt and likely to disappear.
I wish to place on record what I am sure are the thanks of the House to hon. Members who have brought this matter to our attention. I welcome the advancement of what appear to be worthwhile new procedures for discussing Estimates and Supply. I hope that the measures which have resulted in our debates today will enable the House to quiz more closely and carefully on a number of issues that have caused disquiet over recent times. I am sure that few matters will cause more disquiet both here and outside the House than that now under discussion.

Mr. Raison: This has obviously been a critical debate. It is reasonable that it should have been held. I believe that there are answers to the points that have been made. I shall deploy as many of them as time permits. I should like the House to bear in mind some of the special considerations that apply to this project. First of all, it is in one of our dependent territories and, I might add, one of our least developed dependent territories. We have a moral duty, and indeed an obligation under the charter of the United Nations, to develop our remaining dependent territories, not only constitutionally but also economically. For these reasons, the needs of our dependent territories are a first charge on aid funds.
It has long been agreed by those who have a detailed knowledge of conditions in the Turks and Caicos Islands that the only hope of developing a viable economy lies in the development of tourism. I know that this point has been argued. My hon. Friend the Member for Stroud (Sir A. Kershaw), I think I can claim, supported it, as did my hon. Friend the Member for Hertford and Stevenage (Mr. Wells). I can assure the House that there is little scope, as I understand it, for improving the general standard of life in this dependent territory other than by investment in tourism and in the infrastructure that tourism requires.

Mr. Mark Hughes: I suspect that I am the only hon. Member present 'who has been to the Turks and Caicos Islands in the last 20 months. The proposal that tourism is the only solution is not acceptable to much of the rest of Turks and Caicos outside Providenciales.

Mr. Raison: All I can say is that the development of tourism, I should have thought, must be central. If there were other activities, I do not suppose that anyone would worry. It seems to me a reasonable decision to concentrate on the development of tourism.
The grant of funds by Her Majesty's Government to improve the airport and roads on Providenciales is the direct result of a request made to us by the Turks and Caicos Islands Government. I hope that hon. Members would agree that such a request from a dependent territory, badly in need of development, should always be sympathetically considered by the Government of the day. Hon. Members will be aware that the grant was not approved until there had been a full feasibility study by independent and expert consultants. They recommended


that the project should proceed. I repeat that the islands need developing. It is hard to see a way of achieving that apart from tourism.
As the House knows, at the end of February 1983 the work of the project was about 92 per cent. complete overall. I am talking, of course, of the Government's side. I cannot, on this occasion, comment at length on the merits of the project itself. There has already been a full and lengthy inquiry into all its aspects by the Foreign Affairs Committee, which published its first report in July 1981. That report was critical but the criticisms contained in it were robustly answered by the Government in their observations on the report, published as Command 8386. Last week, the Foreign Affairs Committee published the report of a second inquiry. Despite the debate that has taken place today, it is my understanding—I am answering here the hon. Member for Birmingham, Ladywood (Mr. Sever)—that the Committee will also expect a detailed and considered response to its several criticisms as set out in the report. It is therefore the Government's intention to publish our response to it in a White Paper which will be issued in a few weeks' time.
I should like to try to pick out some of the significant points made in the debate. My hon. Friend the Member for Stroud stated that the project must provide employment for local people. I know that the evidence submitted by the ODA to the first inquiry of the Overseas Development Sub-Committee pointed out that the Club Med village would provide direct employment for 200, in addition to any islanders who might be selected to join the Club Med organisation itself. Consultants estimated that over five years total employment, direct and indirect, would amount to nearly 600. If further hotel development follows, a total of 1,300 to 1,600 jobs may be created over a 10-year period—that in an island group with a population of 7,500. The hon. Members for Sheffield, Heeley (Mr. Hooley) and for Norfolk, North-West (Mr. Brocklebank-Fowler) asked why there should be a third international airport. The other two airports are on Grand Turk, which is the capital, and South Caicos. Grand Turk and South Caicos are already fairly well endowed with hotels. The view is taken that Providenciales is the most attractive of all the islands and therefore the most likely to be in favour with tourists. It is not considered practical to transfer tourists to Providenciales from Grand Turk or South Caicos, a distance of over 50 miles.
I wish to concentrate on what are perhaps the major points. The first with which I should like to deal is the allegation that the ODA failed to show sufficient determination in pressing Club Med to fulfil its side of the agreement to build the village. There was a period of nearly three years between the signing of the agreement and the date on which the village should have been opened. During this time, Club Med had to design the village, to negotiate with the contractors and then, finally, to construct. Given the estimated period for construction, it would not have been reasonable for either the Turks and Caicos Islands Government or Her Majesty's Government to intervene with Club Med and press for a start to be made on construction until the end of September 1981.
As soon as this deadline had passed, my right hon. Friend the Member for Banbury (Sir N. Marten) took immediate action and wrote to M. Trigano, the president of Club Med, on 5 October expressing his concern at the

delay. M. Trigano replied on 5 November confirming his intention to build the village, which he hoped would be open by the end of 1982 or by spring 1983 at the latest. That letter was acknowledged on 16 November with a request that we should be kept informed of progress. Between November and February 1982, Johnston Construction Ltd. was in weekly contact with Club Med but little progress was made.
On 16 February 1982, ODA officials, in my right hon. Friend's absence, sent a telegram to M. Trigano again expressing concern, asking for swift completion of contract negotiations and seeking an early response. M. Trigano replied on 2 March stating that Club Med had always respected its commitments. He sought a meeting, which took place on 22 March. At this meeting, M. Trigano gave further reassurance that he expected to complete negotiations to build the village in a matter of a few weeks. When this did not happen, the French Government were asked to intervene but declined to do so.
Last August, my right hon. Friend the Member for Banbury warned M. Trigano on behalf of the Turks and Caicos Islands Government that the right to pursue legal remedy was reserved. This would seem to have caused Club Med to resume urgent negotiations, this time with two British contractors. It was not, of course, until 1 January this year that Club Med was in fact in breach of the agreement. As the House knows, I saw M. Trigano on 21 January and informed the House on 24 January that he had assured me that a binding contract would be signed by 31 March. I made it clear to him that unless a contract satisfactory to the Turks and Caicos Islands Government is signed by that date, the Turks and Caicos Islands Government will initiate legal proceedings.
I have not had any communication with M. Trigano since that meeting, but hon. Members may be aware that on 28 February Club Med issued the following press release:
Club Med and Johnston Construction Limited of Redhill, Surrey, signed an agreement in Paris on Friday 28 February in connection with the building of a Club Med resort on the island of Providenciales in the Turks and Caicos group. The total investment involved amounts to US $23 million for a complex of 576 beds. Work is scheduled to commence in April 1983.
A copy of this agreement has just been received from Club Med and it is being studied urgently. I understand that it expresses the intention of both sides to work together with a view to entering into a binding contract by 31 March. I hope that Club Med seriously intends to fulfil its agreement. If not, legal proceedings will be initiated.
This brings me to the second point expressed today, that the agreement between Club Med and the Turks and Caicos Islands Government is ineffective. Several months ago, the opinion of a leading counsel in commercial matters was sought, and he advised as to the remedies for breach of the agreement by Club Med. He certainly did not say that the agreement was defective in any way so as not to secure adequate remedies against Club Med. The agreement is not ineffective. It specifically provides for any breach to be referable to arbitration. Any award against Club Med would be enforceable in law.
Another point that has been made today concerns the possible increase in drug trafficking arising from the building of the airport. I am advised that this conclusion is based on the flimsiest evidence, if there is any evidence at all to support it. My Department does not consider that the improved airport on Providenciales will contribute to an increase in drug trafficking on the island. There appears


to be a misunderstanding of the nature of the problem in the island. The territory has been used for the covert refuelling of drugs-carrying aircraft in transit from south to north America. A fully manned and well-operated airport is more likely to be avoided by illegal flight operators than the previous substandard airstrip, and the development of Providenciales has also meant an increase in the number of police, customs and immigration officers on the island. I have no evidence either that there has been corruption in connection with the airport project.
I am afraid that I cannot reply to all the questions that have been raised today, but I reiterate that we shall be publishing a White Paper in response to the Select Committee's recommendation. Although there may always be differing opinions about the merits of this project, I am convinced that it is a reasonable use of aid funds. It it is successful, as I very much hope it will be, and the village is built, the economy of the Turks and Caicos Islands will benefit.
If, on the other hand, the village is not built, the House may be assured that, with the full support of Her Majesty's Government, the Turks and Caicos Islands Government will vigorously pursue the legal remedies open to them. I stand by what I told the House in January, and I am glad that at least the Select Committee endorsed that.

Sir Anthony Kershaw: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Original question deferred, pursuant to paragraph (2) (c) of Standing Order No. 18A (Consideration of Estimates).

Ports (Reduction of Debt) Bill

Order for Second Reading read.

The Under-Secretary of State for Transport (Mr. Reginald Eyre): I beg to move, That the Bill be now read a Second time.
The Bill is needed to implement the Government's decision to write off part of the debts of the Port of London Authority and the Mersey Docks and Harbour Company.
As I understand that a number of right hon. and hon. Members wish to speak in this debate on matters relating to ports, it may be for the convenience of the House if I make a speech introducing the Bill and subsequently, if I catch your eye, Mr. Deputy Speaker, and with the leave of the House, seek to reply to the points raised in the debate.
The Bill was foreshadowed in the announcement about the future financial regime for these two ports, which my right hon. Friend the Secretary of State for Transport made on 15 December last year in replying to a question from my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter).
Although this measure is short and straightforward, it needs to be seen in the context of the general strategy that we have been following to enable London and Liverpool to cope with the formidable—and exceptional—problems with which they have been faced. It may, therefore, be helpful if I first say something about the various steps that have been taken over the past two years or so before I go on to deal with the detailed provisions of the Bill.
The problems that the PLA and the MDHC have been facing have been a reflection of the fundamental changes

that have been taking place within the ports industry over the past 15 or 20 years. I am not sure that it is widely realised outside the industry just how dramatic those changes have been.
Until 20 years ago, nearly all general cargo had to be handled manually, whereas now as much as two-thirds travels either in containers or by roll-on/roll-off services. In this period, too, there has been massive development of oil traffic and of other bulk cargoes. Alongside these changes the direction of our trade has changed significantly. The proportion of our seaborne trade with other EC countries has doubled in 10 years, while there has been a tendency for deep-sea ships to make only a single United Kingdom call before going on to the continent.
In general terms, these changes have tended to swing the balance of our port trade from the west coast to the south and east. This has inevitably made life particularly difficult for many of our west coast ports, and I recognise the vigorous efforts that they have been, and are, making to adapt to the new circumstances, and in some cases even to win back traffic from the south and east. The two ports hardest hit by the changes I have described have, of course, been the two greatest general cargo ports—London and Liverpool. It is in these two ports that the problems of adjustment have been greatest and have necessitated assistance from the Government.
By the beginning of 19:31 both the PLA and the MDHC were effectively bankrupt. This stemmed from a number of factors, including changes in the pattern of trade and the rapid growth of container traffic, and was brought to a head by a dramatic fall in traffic in 1980, when both ports lost almost 40 per cent. of their general cargo business. Each of these port authorities therefore found itself with over 1,000 registered dock workers for whom there was no work and no prospect of there being any.
Urgent action was needed to avoid PLA and MDHC going bust, which would have had disastrous consequences. As an emergency measure we therefore took powers in the Ports (Financial Assistance) Act 1981 to provide funds for severances and to enable the two ports to stay in business meanwhile. The limit on such assistance of £160 million set in that Act was intended to be sufficient to meet the ports' needs in 1981–82, but we made it clear that longer-term support would depend on the preparation by PLA and MDHC of corporate plans showing how they proposed to return to viability.
Those plans were submitted to the Government in the autumn of 1981, and showed that further substantial manpower reductions, improvements in working practices and other rationalisation measures were needed but that if these could be achieved the two port authorities could become profitable again. The Transport (Finance) Act 1982 therefore raised the limit on assistance under the 1981 Act by £200 million to £360 million.
In bringing that legislation before the House, my right hon. Friend made it clear that he intended that the deficit grants which we had been making to both ports since the beginning of 1981 should cease at the end of 1982. However, he also said that, because of the exceptional circumstances I have described, the Government were prepared to continue meeting the cost of severances in London and Liverpool, and severance offers in April and May last year enabled the PLA and the MDHC to make the very large further reductions in manpower which were then necessary.
Over the past two years, considerable progress had been made in London and Liverpool to improve efficiency and reduce costs. So far the Government have provided about £210 million assistance, and more than half of this sum—about £113 million—has been to meet the cost of essential severances. Other badly needed rationalisations have also been made—for example, in the withdrawal by the PLA from cargo handling in the Royal group of docks, and by MDHC from cargo handling at Birkenhead; and major improvements in working practices have been negotiated.
The PLA and the MDHC have achieved much over the past two years to adjust to the enormous changes which have taken place in cargo handling techniques and patterns of trade and to bring their manpower numbers into line with the requirements of the traffic they now handle. Both bodies have argued that the interest burden which they now have to bear is not in line with the revenue which they can reasonably be expected to earn, and have asked for complete write-offs of their debts to the Government.
As my right hon. Friend made clear in his statement last December, such large write-offs could not be justified; but he said that the Government were prepared to agree to limited capital reconstructions in each case and would be seeking the necessary legislative authority. Hence this Bill.
In the case of the PLA the debt reduction involves writing off £26 million of debt to the Government relating to underused assets and providing the authority with £22 million of grant to enable it to repay the amount outstanding on a commercial loan, known as the Lazard loan, which is currently guaranteed by the Government under the Ports (Financial Assistance) Act 1981. I should explain that the Lazard loan was taken out by the PLA a few years ago to finance earlier losses. For the MDHC there will be a write-off of not more than £36 million of debt to the Government relating to underused assets; in this case the precise figure will be determined in the light of work which is currently being done by the Secretary of State's consultant accountants, Peat Marwick Mitchell and Co.
These debt reductions cannot be achieved using our existing powers to help the PLA and the MDHC. Clause 1(1) therefore enables my right hon. Friend, with the consent of the Treasury, to reduce the debts of the PLA and the MDHC to the Government by up to £26 million and £36 million respectively, while clause 1(2) provides for the payment of grant to enable the PLA to pay off commercial borrowing. The Bill also provides, in clause 1(3), for these debt reductions to count against the £360 million limit on assistance set in the Transport (Finance) Act 1982.
Perhaps I should say a little more about why the Bill prescribes upper limits on the amounts of debt involved, rather than the precise figures. I have already explained that in the case of the Mersey write-off the exact amount has yet to be determined in the light of work by our consultant accountants; but there is, however, one other factor which needs to be taken into account.
Until the write-offs provided for in the Bill can be achieved, the two port authorities will have to continue making payments of principal as they fall due from time to time; this will obviously affect the exact amount of debt remaining to be dealt with under the Bill.
Finally, let me say something about the Government's attitude on future financial assistance to the ports of London and Liverpool. For the time being we shall continue meeting the full cost of severances. This will include the 300 or so registered dock worker severances currently needed in each port. Although the reductions being sought by the PLA and the MDHC are substantially smaller than those made in each of the past two years, they are none the less just as necessary.
Both ports must continue to do all they can to reduce costs and improve competitiveness, and reductions in surplus manpower are, sadly but necessarily, a vital part of this. I very much hope that there will be a good response to the very generous special severance offer recently announced by the National Association of Port Employers, under which the maximum severance payment for dockers with 15 years' service or more will be raised to £22,500 for a limited period.
The financial consequences for the PLA and the MDHC will, of course, be serious if they are unable to achieve essential manpower reductions. But the current dispute in London over the claim by registered dock workers for parity with clerks could potentially be even more damaging. I understand that the registered dock workers' claim would represent a 30 per cent. increase in basic rates and add £3 million to the PLA's wages bill.

Mr. Robert Hughes: Before the hon. Gentleman leaves the special severance scheme, it was my understanding that the special offer of £22,000 had now been closed. Has a new offer been announced in the very recent past?

Mr. Eyre: The hon. Gentleman is quite right. A new offer of £22,500 will be available as from today.

Mr. Teddy Taylor: Apparently an extra offer has been made available to registered dock workers. Will my hon. Friend explain, either now or in writing, the position of members of the excellent Port of London police authority, who have had their numbers reduced very seriously because of the reduction of work in the port?

Mr. Eyre: I regret that I cannot answer that in detail now, but I shall be glad to write to my hon. Friend explaining the position.
As I was saying, the registered dock workers' claim would represent a 30 per cent. increase in basic rates and add £3 million to the PLA's wages bill. I do not see how anyone can argue that such a huge increase is defensible or realistic when inflation is so low and when the PLA itself is, to quote its finance director,
living on a razor's edge".
I very much hope that Opposition Members will be doing all they can to persuade the dockers involved that their current strike action is not in their own interests, not in the interests of their colleagues in the PLA, and not in the interests of the PLA.
The PLA has offered 3½ per cent. without strings to all its employees and to discuss with the unions the scope for productivity agreements for particular groups of workers.
In case there are any doubts about the Government's position, or those involved in the present dispute think that the PLA can turn to the Government for the money needed to meet their claim, let me repeat: operating subsidies came to an end last December, and there is no question of their being resumed. I hope that everyone involved will


bear that crucial factor in mind in the coming weeks and months as the PLA and the MDHC struggle to return to viability.

Mr. Robert Hughes: I say at once that we shall not vote against the Bill at the conclusion of the Second Reading debate tonight, because we are well aware that the Port of London Authority and the Mersey Docks and Harbour Company are in serious financial difficulties and need this help.
However, as I am sure the Minister knows, there is considerable resentment, in many parts of the country. That resentment which is shared by both the work forces and managements in ports, concerns what appears to be the preferential treatment that is given to London and Liverpool. We accept, of course, that the Government are responding to the problems in those two ports because of the difficulties that exist there. Nevertheless, many of my hon. Friends who represent ports in other parts of the country will elaborate on their financial problems. If my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is fortunate enough to catch your eye, Mr. Deputy Speaker, he will tell us much about the problems of the Clyde Port Authority. The problems there exist in many other places.
Despite what the Government have done, I am sure that the Port of London Authority is not wholly satisfied with the Bill or with the results that may flow from it. It may have been a slip of the tongue, or perhaps the Minister's brief was not as full as it might have been, but I understand that the £26 million of Harbours Act loans is not simply a question of existing assets which are no longer earning revenue but that that £26 million was borrowed to pay interest on existing debts. When a company has got to the point of borrowing money to pay interest on its debts, it is in a very serious way. Clearly, the money is needed.
Even with this reconstruction—it is only a partial capital reconstruction—the Port of London Authority will not be financially viable in a true commercial sense. I understand that the PLA's balance sheet is not strong enough to allow it to borrow on the commercial markets, should the need arise. The Minister rightly said that, as from the end of December, the Government will not provide any further revenue deficit financing and that such Government finance as is available will only be for essential capital expenditure and the cost of severance. That means that the PLA, in particular, is in grave difficulty.
I want to ask the Minister a question about the extension of the special £22,000 severance scheme for registered dockers with over 15 years' service. Is it available to all ports, or is it primarily or solely for London and Merseyside? Of the number of registered dockers who are available for work at present throughout the country, many are in Liverpool and London. But there are many other ports where the excess of dock labour is much greater and where attempts are being made to solve some of the manpower difficulties. As long as the £22,000 is available for Merseyside and London, no one will leave until he gets that amount. So, even if the Government do not intend at present to have the special scheme for all ports, they will have to come round to it, as happened on the last occasion. When the £22,000 was initially proposed some months ago, it was supposed to be only for London and Liverpool, but it became the norm.
The Government seem to view the problems of ports solely in terms of the reduction of manpower, and they see severance not only as the only answer to the problem but the only problem facing the ports. In my opinion, many other factors should be taken into account.

Mr. Eyre: Perhaps it will help at this stage if I confirm that the scheme, including the increased payment of £22,500, is available to all registered dock workers in all the ports in the country.

Mr. Hughes: I am grateful to the Minister for that statement, which I am sure will be welcomed throughout the United Kingdom.
The Minister tells us, not for the first time—it is the first time that he has said it, but his predecessors have said it often—that this is the last time that there will be handouts to London and Merseyside. In fact, it is about the fourth time that we have had a Bill to deal with these two ports, and I suspect that we shall have another. I marvel at the Minister's almost insatiable lust to produce legislation. Bills tumble out of the Department of Transport faster than Parliament can deal with them. There is a Transport Bill now before the House. At present it is in the other place, having been driven through this House on a guillotine motion. That Bill, too, contained a provision dealing with London and Liverpool. Clause 11 provided for the writing off of the £23.8 million loan to the National Dock Labour Board, which was used to finance special severance payments.
Perhaps I am a little too charitable in thinking that Ministers like preparing and debating Transport Bills. There is an alternative possibility: it may simply be incompetence in the Department. It is difficult to understand why clause 11 was in the Transport Bill. Severance payments, after all, are a matter for the Department of Employment. Yet, only four months ago, the contents of this Bill were left out. When we discussed the future of these two ports briefly in Standing Committee, the Secretary of State, with all the firmness at his command, said that he did not agree with the strategy for the ports outlined by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth). He said:
this measure"—
that is, clause 11—
is introduced because it is part of a larger scheme of things, and it is only part of the measures necessary to see our ports through the revolutionary conditions in the best possible way. It is a part that requires legislation, and that is why it is in the clause".—[Official Report, Standing Committee A, 25 January 1983; c. 1039.]
Apparently, however, even as late as January, the Minister did not know that he needed further legislation. It was part of a broader strategy. Yet, within a matter of days of finishing quite a lengthy Transport Bill Committee stage, this new measure was brought forward, although, as the Minister fairly said, the crisis in the ports of London and Liverpool has not arisen in the past few months.
I can see only one reason why the Government are proceeding in such a piecemeal fashion both with the ports of London and Liverpool and with ports generally. The Government have no long-term strategy for British ports, other than selling off the profitable assets that may be around, such as Associated British Ports, to which I shall return. It is equally clear that, the Government having dissolved the National Ports Council, there is no one and no body to take an overview of the ports industry. There is no one to look at the complex problems of the industry


as a whole, no one to comment or to give advice to Ministers from time to time to ensure that there is some balance in port traffic and that issues are discussed.
There has been a recent study on the ports, although I have not been able to obtain it from the Library, entitled "Port Choice and Routeing of UK Trade", published by Economic Consultants Ltd. at a price of £10. I am afraid that at that price not many people will rush to the shop to buy it. That report is based on a survey of the inland origins and destinations of United Kingdom international trade which was conducted by the Department of Transport together with the National Ports Council and with the help of Her Majesty's Customs and Excise. What factors does the report suggest affect port choice?
The Department of Transport issued a helpful synopsis of the report in press notice No. 453. That says that the factors are the inland distance to the port; the cost of inland transport in relation to the value of the commodity; the availability of rail services; the pricing strategies of shipping lines; the preference in certain cases for a single United Kingdom port of call and the length of the sea crossing. The only surprising thing about those factors is that they are not surprising. One would expect such factors to influence people in the choice of port.
One of the major difficulties of the report—indeed, of many other reports—is the delay in analysing statistics. As I said, the report was based on a survey in 1978, and a lot of water has passed under the bridge since then. Indeed, the other points of interest in the Department of Transport's press notice have already changed. Among the points of interest that the new report brings out is that in 1978 over half the traffic was handled by a local port—a port in the same region as the inland origin of destination. It tells us that unitised traffic—containerised traffic—is likely to travel much longer distances. For example, only 20 per cent. of container traffic travelled less than 100 kilometres while 70 per cent. of non-unitised traffic travelled less than 100 kilometres. It also pointed out that over 6 million tonnes-15 per cent. of the traffic generated in the north of England and in Scotland—was handled by ports in the south. Northern ports handled less than 2 million tones—7 per cent. of southern traffic. It also pointed out that 79 per cent. of United Kingdom trade carried inland went by road, 18 per cent. by rail, and 3 per cent. by inland waterway or by sea.
We know that since 1978 the trend towards containerisation has accelerated. We also know that the drift of cargo from the north and west of the United Kingdom to the south and east has accelerated. My right hon. Friend the Member for Barrow-in-Furness drew our attention to the statistics when we discussed the matter in Committee. He drew attention to the Department of Transport's helpful publication "Transport Statistics for Great Britain 1971–81". Table 5.2 shows that in 1971 the ports handled 2,157 units; in 1975, 2,830 units; in 1979, 3,687 units; and in 1981, 3,792 units. That must be thousands, not individual units. The number has continued to increase since 1981, because that is the modern, economic way to handle port traffic. We also see that this is a much higher proportion of total traffic than previously, so the trend has gone up. Those statistics, published at the end of last year, show that the west coast ports' share of non-fuel traffic has dropped from 46 per cent. in 1965 to only 28 per cent. in 1980. The share of non-fuel traffic in

the southern ports has risen from 7 per cent. to 17 per cent. and in the south-eastern ports from 25 per cent. to 28 per cent. Therefore, we see that there are already major events taking place in how ports are operating.
A major factor governing port choice is shipping lines' pricing strategy and the preference in some instances for a single United Kingdom port of call, and sometimes a single European port of call. We should not imagine that the preference for a single port of call is happening only in Britain; it is happening elsewhere. It has been put to me strongly that one reason for the shift in trafic is the operation of the grid pricing system and that that system has had a seriously distorting effect on trade patterns through northern and western ports. As I understand the grid pricing system, the customer benefits. The shipping company pays the difference between the cost of goods landed at a local port and the cost of goods landed at a further port to suit the shipping company. In other words, if a company in Aberdeen wanted to bring its goods to Glasgow, there is a price for shifting the goods from Glasgow to Aberdeen. However, if it suits a shipping company to land goods in Southampton, the customer will not have to pay any more for the transport of the goods. That is seriously affecting trade and, as I said, it has been brought strenuously to my attention. It is the shipping companies that are calling the tune, and that has been demonstrated by the figures that we have been given.
Faced with the problems in the ports and with the changing patterns of trade, we are entitled to expect a clear statement of policy from the Government. They have introduced a Bill which provides specific moneys for London and Liverpool, but that is not good enough when we know that many other ports need money. It is difficult to get the Department to make a clear statement of policy. Strangely enough, we have a clear statement of policy in page 18 of the prospectus for the sale of Associated British Ports. It comes in the form of a letter written by the Secretary of State to the chairman of Associated British Ports. We have not had an opportunity to debate that offer for sale, but we are entitled to do so because the company was set up by an order which could not be debated in the House. Therefore, we can only debate the issue after the event. That is the only way that we can see how the Government treat the ports that they intend to sell off to the private sector and how they deal with the public sector ports.
The sale of Associated British Ports was a good bargain in the market place. The initial share price set for Associated British Ports was 112p. When trading opened on the Stock Exchange, the shares were available for 137p, which is a considerable mark-up. On Friday the shares stood at 143p. I do not know what they stand at today. The lowest trading figure was 129p, the highest 147p. Why was such a premium put on the shares? The company has assets of just over £148 million. That company, in the six years to 30 December, invested nearly £60 million in the capital development of the ports.

Mr. Eric Cockeram: On a point of order, Mr. Deputy Speaker. How is the sale of the shares of Associated British Ports and the machinations of those shares on the stock market relevant to the Ports (Reduction of Debt) Bill, which refers to London and Liverpool, which are not part of Associated British Ports?

Mr. Deputy Speaker (Mr. Paul Dean): Comments can go fairly wide in a Second Reading debate.

Mr. Hughes: I understand the nervousness and embarrassment of the hon. Gentleman in not wishing this issue to he discussed. He knows perfectly well—he has been in the House longer than I have—how one group of ports, in direct competition with another group of ports, has been dealt with.
During the six years prior to 30 December 1982, more than £60 million from revenue, not from borrowing, was invested in capital development in the 19 ports. In 10 years this group of ports was able to invest £100 million without borrowing. Past profits, as can be seen from the prospectus, were very good. As if it was not enough that access was being made available to these expensive and good ports, an £81 million loan was written off before the company was put up for offer, thereby making the sale more attractive to prospective investors.
How much money did the Government seek to raise from the sale of shares in Associated British Ports? The Government are apparently concerned to harness the public purse, but in the Bill they are writing off £81 million of public money. Hon. Members may think that the maximum possible price would have been achieved for assets that are sold off. Some 19 million shares were being offered at 112p per share to raise £22 million. It is a pretty good bargain. Assets worth £148 million were sold off and a loan of £81 million was written off to raise £22 million. Not surprisingly, when the prospectus was available, 156,000 share applications were made, worth £700 million. The shares were 30 times oversubscribed. Even if hon. Members allow for the fact that when a good bargain is made available, duplicate or multiple offers are made—people who are aware that an issue may be oversubscribed put in several different bids in the hope that when the ballot occurs for the allocation of the shares they will get some—for the shares to be oversubscribed by 30 times is quite astonishing.
The Secretary of State for Transport, in his letter in the prospectus, makes clear that, although the Government will hold the majority of the shares, he will not interfere in any way with the decisions of the directors, except in the national interest, although the "national interest" has never been fully described. When the Secretary of State issues press notices, he ought to be careful to ensure that they are not misleading. I am the last person to accuse the right hon. Gentleman of deliberately misleading the country or the House, but he must have a care as to what is issued either in press notices or in written answers under his name.
The hon. Member for Bridlington (Mr. Townend) tabled a question asking the Secretary of State for Transport if he would make a statement about the sale of shares in Associated British Ports. The Minister said:
The response from employees was very encouraging and a total of 8,115 employees, over 90 per cent. of those eligible, now have a total of 1,736,545 shares".
The answer concludes:
I wish the group, with the support so substantially demonstrated by its employees, a successful future in the private sector".—[Official Report, 16 February 1983; Vol. 37, c. 177.]
That does not square with my information, which comes from an impeccable source. Approximately 8,000 of the 9,250 employees eligible applied for the 53 free shares worth £60. Of the 8,000 who took up the offer of the free shares, about 3,500 applied to buy shards. The prospectus for the employee shareholders stated that, having taken the free shares, they were entitled to bid for a limited number of shares, and for every share they

bought they were to get another free share, so they would get three shares for the price of one. Only 3,500 employees took up these shares, whereas the Secretary of State's answer suggests that 90 per cent. of those eligible actually bought them. That is the full implication of the written answer. The right hon. Gentleman ought carefully to examine how written answers are drafted and not overstress the importance of shares.
The employee shares are held in trust. Those who bought them cannot go to the stock market to sell them at 147p. They have to be held for a set time. The trustee operates on their behalf. What hon. Members do not know, and are entitled to ask—I hope the Minister will give an answer to the House on this subject—is how employee shareholders can get together to give instructions to their trustee on policy matters. The 3,500 applications for shares included the directors. Hon. Members do not know how many shares the directors bought. Perhaps the employees have a small shareholding. The employees' shareholding of equity is 2·5 per cent. of free shares and 1·5 per cent. of bought shares. Therefore, 4 per cent. of shares are in the hands of employees. That does not show a dominance of employee shareholding.
Throughout the debates on this subject hon. Members have resolutely asked successive Secretaries of State and Under-Secretaries, when dealing with the ports of London and Liverpool, to publish the corporate plans for those two ports. Every time we have asked, we have been refused the information on the ground that it would be commercially damaging to publish such corporate plans. As different legislation has passed through the House, we have tabled amendments asking successive Secretaries of State and Under-Secretaries not to pay out any money without an annual report from the Secretary of State on how he has used the money. After all, he can spend some of it without coming to Parliament. We have asked what the overall strategy is. However, time and again we have been refused that information.
It is self-evident that these two ports, as well as the other ports, suffer from the trading recession. The problems of revenue and profitability are exacerbated by the drop in the volume of trade available. However, even if the so-called great economic recovery arrives, we shall still need a national policy for the ports. For some time we have believed that we need a national ports authority to assume the ownership and control of the majority of United Kingdom ports.
The Government removed the only body that could give any advice or oversee the situation—the National Ports Council. At the first opportunity the Labour party intends to set up a national ports authority to deal with such issues. We are convinced that we can have a successful ports policy only by basing it on public ownership and that a central authority is needed urgently to consider the whole strategy.
Time and again we have warned the Government that the ports of London and Liverpool are staggering from one disaster to another and that they will always be returning for fresh financial assistance. Despite what the Under-Secretary of State has said, we are convinced from our examination of events that the Government cannot adopt a laissez-faire attitude towards the ports. There will probably have to be yet another Bill this Session to try to resolve the financial problems of those two ports. A proper strategy for them alone, if not for all our ports, is long overdue. I do not expect the Minister or the Government


to be able to respond, because they are prepared to stagger on. However we are not, and we shall take the earliest opportunity to put matters right.

Mr. Malcolm Thornton: Before launching into my remarks, perhaps I could describe the remarks made by the hon. Member for Aberdeen, North (Mr. Hughes) as more of a voyage than a speech. Even as an experienced navigator, I would hesitate to follow the course that he has attempted to steer on Second Reading. The hon. Gentleman referred to Associated British Ports, and one of the features of ports such as Garston is that they are easily managed and containable. Garston is a small port, which has been sensitive to the market and remained competitive. It has been able to adjust itself to the changes in trade patterns and has won trade when many other ports have lost it. It is unfair to draw a comparison between a port such as that and the ports of Liverpool and London, whose problems are on a far different scale.
This debate takes place against an extremely depressing background. From 1955 onwards, and until I became a Member of Parliament, I was involved in the port of Liverpool and in the day-to-day operation of one of the ports under discussion. Therefore, I am well qualified to speak on some of the matters raised by my hon. Friend the Minister and the hon. Member for Aberdeen, North and on the reasons for the decline in trade.
There have been major shifts of emphasis in the way that our cargoes are carried. I remember seeing a headline that appeared some years ago in yd's Register of Shipping said "Containerisation, yes, but not too fast". Even then, in the early 1970s, it was recognised that the effects of too rapid a change would be quite dramatic, and would be detrimental to many of our ports. A market force was at work, and ports must recognise market forces or they will decline and possibly die. If the customer wants containerisation, containerisation and the facilities for dealing with containers must be supplied. Those facilities are expensive and require tremendous capital investment. If many of the existing facilities are maintained at the same time, although they are increasingly underused, the cost equation will start to look very sick.
Bulk cargoes also played their part. In the late 1950s the Mersey Docks and Harbour Company together with Shell embarked on the building of the Tranmere oil jetties. It was a huge investment for the new large crude carriers that were to bring oil into the Stanlow refinery. Despite that major investment, it was only a relatively short period before new technology, ideas and even bigger ships superseded Tranmere. Ships that once came into the river Mersey and paid dues to the port authority discharged their cargoes off the coast of Anglesey, at the single buoy mooring.
We also lost trade to other ports, particularly in Europe. The number of visits that ships were making has already been mentioned. Liverpool was once the great port for ships going to and coming from the Far East fully laden. The ships would discharge their cargoes at Liverpool as their first main port, would travel round the coast and the continent and would return to Liverpool to load fully before returning to the Far East. However, those ships disappeared almost overnight. When I say that, I mean it. Although it was more than a decade ago, it does not seem

long ago that one could see the River Mersey at any time of tide full of cargo ships waiting to berth. At every tide, the port radar station gave out the 15 or 16 ships that were anchored at the Mersey bar, awaiting berths. The port was busy and vibrant, but it seemed to disappear almost overnight. The ships disappeared as patterns of trade changed, but, unfortunately, all the infrastructure of the port that existed to support that level of traffic was still there and had to be paid for. Many of the jobs in the port that had been supported by the previous levels of trade could no longer be sustained.
We have now seen a world recession and a significant amount of the world's tonnage is tied up and is not carrying cargoes around the world. There are fewer ships and fewer cargoes are being carried, but the infrastructure and manpower have not been significantly reduced. Such factors have contributed to the problems of ports such as Liverpool. On Merseyside we all know that there has been a further serious consequence. I refer to the number of port-related jobs that have been lost. The port of Liverpool-Birkenhead used to sustain many thousands of jobs that were related directly to the port. They have all gone. Thus, decline almost feeds on itself and many parts of the port that were once prosperous, job-producing areas of Merseyside are now defunct and in almost total decline.
While it is good to see what has happened in the south docks, and that some use is being made of the derelict land, thanks to the Merseyside development corporation, nevertheless one can remember when those docks were full of ships, full of people employed in the shipping industry on Merseyside, bringing prosperity to the area. That is the background, and it is against that background—and where we shall be in 10 years' time—that we have to consider what the Bill means to us today.
Clearly, ports such as Liverpool and London which are facing problems must have some extra aid to enable them to get through a very difficult period. I have said on previous occasions that I do not support subsidies generally. I can understand many hon. Members on either side of the House saying that what is done for one should be done for another. Why is this support from the Government necessary?
The problems that many of the ports are facing—Liverpool is a case in point—are partly due to Government interference. The national dock labour scheme is a millstone around our ports and the problems arising from it should have been tackled long ago.

Mr. Frank Field: The hon. Gentleman describes the national dock labour scheme as a millstone around the ports of this country. Would he describe it as a millstone around the dockers?

Mr. Thornton: Yes, I would indeed. The hon. Gentleman has anticipated a point that I intended to make. Ports have been forced by an agreement, which many of them opposed at the time, to maintain unnecessary high levels of manpower, thus adding to their costs and thus reducing their competitiveness. It is an illustration of one of the problems facing industry generally. By preserving jobs artificially, we end up by destroying jobs. That is the reason why the scheme has not achieved much for the docker: any more than it has for the ports. It is nonsense to suggest that by feather bedding any industry against change, the people in the industry are protected. It simply makes the future that much less certain for them.

Mr. Eric S. Heffer: The hon. Gentleman must surely remember the days when dockers did not have such a scheme, when they had to line up, like cattle at a cattle market, to be picked out by the employer, and when they had no protection of any kind. The only protection that they had was their unity in the trade union movement. Does the hon. Gentleman really believe that the dockers have not benefited as a result of the introduction of the decent scheme brought in through the National Dock Labour Board?

Mr. Thornton: The hon. Gentleman is right to refer to those dreadful days of the past. No one in his right mind would want to go back to those days. But is is nonsense to pretend that things have not moved significantly since then. The hon. Gentleman does himself no credit whatever when he tries to pretend that Conservative Members are suggesting that we should return to them.

Mr. Robert Hughes: The logic of the hon. Gentleman's argument is that the Bill should not be before us today and that if the Mersey Docks and Harbour Company cannot survive without any help, it should go to the wall. Why does the hon. Gentleman not follow the logic of his argument and vote against the Bill?

Mr. Thornton: The logic of my argument is that if the Mersey Docks and Harbour Company—the old Mersey Docks and Harbour Board—had been a free agent, allowed to shed labour and to hire and fire as the demand existed, the Bill would not be necessary. Having to keep on the payroll an excessive number of people has been one of several contributory factors leading to the decline of the port.

Mr. Field: Will the hon. Gentleman give way?

Mr. Thornton: No. I have already given way more than once, and other hon. Members wish to speak.
It is not just the number of registered dock workers that is adding to the problems of the ports. A symposium was held in Manchester some years ago by the port of Rotterdam, which was involved in a heavy promotion, trying to win trade from United Kingdom ports. At that symposium, one of the major shippers from Liverpool asked the representatives of the port of Rotterdam whether they were subsidised. They said "No, we are not subsidised." He asked them "Who pays for the lights?" They said "The Government." He asked them "Who pays for conservation?" They said "The Government." He asked them "Who pays for pilotage?" They said "The Government." The next question was "And you say that you are not subsidised?" There was no answer.
It is most important to compare like with like. It is one thing to make the ports more competitive in terms of manpower—I welcome the Minister's statement today because it is at least a recognition that something has to be done in that respect—but it is quite another thing to leave our ports with a hand tied behind their backs when they are faced with competition of the sort that I have described. By all means let us have competition but let us make certain that it is fair competition.
I refer specifically to the port of Liverpool and its survival plan. I believe that, given the right climate—the Government are helping to create that climate—the survival plan will enable Liverpool to attract back some of the trade it has lost. Indeed, there have in recent weeks been examples of cases where trade has been won back. That can only be good.
I believe that the port of Liverpool is synonymous with the great seafaring tradition of Britain. I hope that my hon. Friend the Minister has seen the marvellous poster, which is in Euston station among many other places, showing the new slim port of Liverpool. There is a very attractive girl on the poster—

Mr. Heffer: In a red shirt.

Mr. Thornton: Yes. She must be a Liverpool supporter. The port is determined to solve its own problems, because ports that compete will survive. In Liverpool we have the ingredients of a survival plan that will work. We have a stable work force—far more stable than people outside Merseyside give us credit for having. The dock labour force in Merseyside will work in cooperating with the management to ensure that the survival plan for Liverpool will succeed.
For those reasons I welcome the Minister's remarks, because I believe that the proposals will enable Liverpool to survive. But I ask him to bear in mind what I have said, because the problem in Liverpool is only one part of a much bigger problem facing the ports of Britain.

Mr. Frank Field: Like the hon. Member for Liverpool, Garston (Mr. Thornton), I support the measure, particularly clause 1(1)(b), which allows the Mersey Docks and Harbour Company to write off debts up to £36 million, but, as would Oliver Twist if he were standing here today, I, too, ask for more.
In arguing my case for more help for Liverpool, I: refer to the Minister's speech. He talked of the dramatic change in trade patterns in London and Liverpool. The hon. Member for Garston has correctly painted a picture of the lively port of Liverpool and the dramatic change that has taken place, almost as if it were overnight.
The hon. Member for Garston referred to the amount of activity and life on the Mersey and the number of ships moving about. As he spoke, one could almost hear the noise of the ships communicating with one another. With this activity came jobs for Merseysiders not only in the port but in surrounding industries supporting the port—jobs which stretched through generations. Those jobs have disappeared. Therefore, in considering the Bill tonight, we are concerned not only with whether it will allow the port authorities of Liverpool and London to survive for a little longer but whether their debt is being structured—if I may use that rather "in" word—in a way that allows other industry to replace those jobs which have been lost in London and Merseyside, but particularly in Merseyside.
In Merseyside we have lost not just a main employer which provided jobs through generations but something which was almost inconceivable few decades ago. If, 10 years ago, we had asked Merseysiders whether they thought that their port would be facing the problems it faces today, most Merseysiders would have said no. One of the great institutions of Merseyside was its port, so not only institutional investors, but many ordinary people, invested in their ports through their work and through the local support that they gave to their port through their savings.
The Minister said that measures such as this are necessary so that the port can continue trading. He said that the port was almost bankrupt. That was the polite


language he used. Bankruptcy is not a new fact of life on Merseyside; it has happened before. More than a decade ago the dock company went bankrupt, and, as a result of the bankruptcy, its debt was restructured. Here lies one of the real problems facing Merseyside at present. People's savings in the port have been lost until the new redemption date. The port authority was told that if, for example, it was able to make a profit, or if it was able to sell its assets, naturally enough the sums that were realised thereby should go to pay those people who had lost their savings through investing in the port. We had, therefore, a restructuring of the debt which acts as a disincentive to success for our area.
I am linking this with a theme touched upon by the hon. Member for Garston, to which other hon. Members will no doubt refer—the role of the development corporation in our area. One of the major problems faced by the development corporation, particularly on the Wirral side of the river, has been a port authority unwilling to release to the development corporation its assets for development, for the reason that, if it does, the port authority will not get a penny. The sums which would be realised would go to those people to whom the port authority owes money. If the port authority hangs on to those assets, and it in the meantime receives a rent, even if it is only a meagre rent, it will be something to put in the balance sheet. Therefore, there is a disincentive which acts against rebuilding and against attracting new jobs into the area. It is in the interests of the port authority not to surrender land, because that will not help its balance sheet, but it is in the interests of the area that at least some of that land should be released.
At the beginning of my speech I said that I rose quite happily, as Oliver Twist would have risen, to say that one needs more. One needs help in writing off a debt of more than £36 million.

Mr. Thornton: rose—

Mr. Field: I shall give way to the hon. Member for Garston in a moment. The Government are introducing small measures. This is the second one since I have been a member of the House and my hon. Friend the Member for Aberdeen, North (Mr. Hughes) expects that, if an election does not intervene, there will be another one before the year is out. The Government are introducing a series of small measures to try to halt the existing financial decline of these major ports, but they remain unwilling to take a long-term view of the needs of the area and to consider how to restructure and write off the larger parts of the debt.

Mr. Thornton: Does the hon. Gentleman agree that, with regard to retention of land by the dock company vis-a-vis the Merseyside development corporation's need for land on the Birkenhead side of the river, one of the ways forward would be a long-term commitment by the development corporation that, should that land become needed for development within a five-year period, it could go back to the dock company? At least during that period it would allow the development corporation to get on with developing and preparing the land. That would go some way to meet the need for using land, which is currently sterilised, on the offchance that it might be needed at some point in future.

Mr. Field: I am in favour of considering all schemes which might bring more jobs to our area. The development corporation is considering such plans. There are short-term plans for the use of the old western ship repair site while longer-term possibilities are being considered for the area. In many parts of the development area the Mersey Docks and Harbour Company is not prepared to surrender the freehold of the land, and without that surrender the development corporation believes that it will be difficult to attract considerable funds to the area. One can see the sense of the dock company doing that, given its responsibility to try to survive. Nevertheless, one can see how destructive that attitude is for the survival of the whole of that area.
Of course, I am in favour of any scheme for creating jobs in the short term, but I also wish to see the restructuring of the debts of the Mersey Docks and Harbour company in such a way that it will allow the development corporation to develop the Wirral side of the river, in the same way as it is trying to develop the Liverpool side. That is immensely important for the reasons given by the hon. Member for Garston. He rightly painted the picture of a massive collapse of jobs, not only in the port but in the surrounding area of Liverpool and Merseyside. On each of the short-term measures that the Government bring before us we must ask whether it is simply a patching-up exercise—another piece of Elastoplast being applied to the deep-seated problems of London and Liverpool—or whether the Government, even if they do so stage by stage, are bringing forward a series of measures which, when added together, hold out the prospect of a revival of long-term prosperity in our area.
Sadly, I do not believe that we shall get that from this measure, although we saw the difficulties of the hon. Member for Garston, who is against feather bedding but is in favour of the £36 million write-off of debt for the Mersey Docks and Harbour Company. How sensible he was to support that measure.
Before I complete my speech I should like to take the hon. Gentleman up on the effects of the dock labour scheme. When I intervened I was not trying to say that one cannot give people the right to a job for ever. For me, the dock labour scheme said to people who had only their labour to sell that they had property rights in the same way as those of us who own our homes and so on. In the days of primeval man, there was a struggle to establish rights to property. So in this century we have seen the attempt to extend what we mean by property rights to people who have only their labour to sell. That means that when there is a lack of demand for their labour, we need to buy those people out of their property rights. Hence the schemes which we have debated in the past, one of which the Minister has today announced in the House, to try to get people to surrender those property rights.
I do not argue that one can give jobs to people for ever and a day irrespective of what is going on in the rest of the country and the world. It was important to give the dockers a major enhancement of their status. But just as we gave them property rights, as in past centuries other people gained different sorts of property rights, so, too, we have a duty to stand by them and buy them out of those property rights as and when the need arises.
Neither Conservative nor Opposition Members are in favour of tearing up the old forms of property rights. So it does not behove anyone in the House to tear up the new


form of property rights—the right to jobs—in a way which we would condemn if we were considering the right to a home or the right to land.
I hope that I have explained that we made an important change in the dock scheme. It is all very well to say that it is a millstone round the necks of the dockers, but, if we do not give them new forms of property rights, how can there be a system of free market forces that would not give rise to the old position where employers could choose to whom they wished to give work that day while refusing others?
I am happy to support the measure, especially clause 1(1)(b), which will act as an important holding operation for the port of Liverpool. I hope that when the Minister replies he will deal with what I have described as the built-in incentive to fail. The Mersey Docks and Harbour Company has every interest not to bring forward land for development, but it is in the interests of Merseyside that much of this land should be developed on a long-term basis. Until we untie that Gordian knot, as the hon. Member for Garston said, the vibration and life and jobs will not return to Merseyside.

Mr. Eric Cockeram: I declare an interest as a past investor in the Mersey Docks and Harbour Company. Those who live in that area have invested savings in the company. However, I have none invested today.
I support the principles of the Bill for the proposed reduction of debt, but there is more to the matter than that. I wish to elaborate on some of the points raised by the hon. Member for Birkenhead (Mr. Field) and be a little more specific. There is considerably more to the reduction of debt in the Mersey Docks and Harbour Company than is apparent in the Bill. It should be conditional on certain action being taken by the company. As has rightly been said, it is the owner of vast areas of stagnant land on both sides of the river. It has no foreseeable use for the land, which covers some 600 acres. It is derelict Victorian dockland and not only does it look derelict: it smells derelict. Stagnant docks and stagnant water quickly become polluted.
I appreciate that the company professes a desire to sell the land, but in reality the evidence to support that is thin. It has a vested interest in not selling. The reduction of debt should be made conditional upon the sale of land. The land lying waste at the south docks of Liverpool, Birkenhead and Wallasey is for sale. Some of the land is already leased to a host of different companies that are using either the whole or part of certain warehouses and paying rent. Some of those companies are anxious to buy, but the Mersey Docks and Harbour Company will not sell because it has a vested interest in continuing to enjoy the benefits of the lease.
The Merseyside development corporation is anxious to buy about 600 acres, but the company will not sell the land to that willing buyer. There are those who say that the company is trying to sell the land but cannot obtain a buyer because it is a depressed area in a period of world recession. That is not true. The development corporation is anxious to buy. It has been unable to reach agreement with the company and is having to resort to a compulsory purchase order. If there was a desire to sell, there would be no need to resort to that. The haggling continues and

outside professional advice has been sought by both sides. That is good for the fees of the professional advisers, but it is not good for Merseyside.
Industrial development in the land is being delayed. Industrialists who seek to take advantage of the many opportunities and advantages introduced by the Government for investment in that area are not willing to sink their capital until they own the buildings. That is perfectly understandable—who wants to invest money in a building that has only a short lease? The enigma is that the company has a vested interest in procrastination and leasing.
The headquarters of the company at the pier head is an asset. I do not know how much it is worth, but it must surely be a seven-figure sum. The company has made no attempt to sell that building. It is a splendid building with marbled halls, mosaic floors, leaded windows and many other grand features. But it is an illusion of grandeur to say that the company still needs such a headquarters building. My hon. Friend the Member for Liverpool, Garston (Mr. Thornton), in his capable speech, extolled the virtues of Garston docks. One of the features that led to its success was that it was a small, compact, organisation with on-the spot management. It was, therefore, more efficient. That is in direct contrast to the Mersey Docks and Harbour Company, whose head office is eight miles from the chief base of its operation at Seaforth.
Clearly, the new slimmed-down management of the company should be adjacent to the action. Does anyone know of a factory with the office running it being eight miles away? The factory may have its office across the road or on an adjacent site, but never eight miles away. It is purely historic for the headquarters of the company to be based at the pier head. The asset could be sold and the company could operate from a more modest and compact setting at Seaforth.
Although I am in favour of the Bill—as are hon. Members on both sides of the House—it is wrong to refer to the reduction of debt as feather bedding. Reduction of debt is a feature of private enterprise capitalism and always has been. It is the writing off of unrealistic debts that have no chance of being repaid. They are constantly written off in the private sector, but we do not call that feather bedding. This reduction of debt is not feather-bedding either—it is a necessary reorganisation of capital.
Subject to the condition of selling land, I support the principles of the Bill. I hope that my hon. Friend the Minister will follow up that point and slim down still further the company's assets to give it a more compact setting at Seaforth. The writing down of debt is necessary for the future prosperity of the company. It will have my good will for the future if it takes the steps that I have mentioned.

8 pm

Mr. Arthur Palmer: There have been several Bills of this sort to give financial assistance to the London and Merseyside docks and I have never been opposed to those Bills as a Bristol Member. Indeed, such action by the Government was inescapable. The ports' structure and organisation 'would have collapsed without Government intervention. Whenever we have discussed these Bills I have spoken up on behalf of the port of Bristol and I make no apology for doing so again.
The Minister talked about the adverse winds of trade. I have no doubt that those winds have blown strongly on


the Thames and the Mersey—no port ever escapes them. The same adverse conditions and the same strong winds have prevailed on the Severn and on the Bristol Avon.
Bristol's difficulties are well known to Government Departments and to those who take an interest in these matters. The port's debt accumulates steadily but the city council cannot escape from it, it being a municipally owned port. The port's finances can hardly be separated from normal local government finances. Half the city's rate revenue will soon be called upon to keep the port in existence.
If relief were sought by the port ceasing to trade, the city would remain responsible for all the outstanding debt. Without special Government action there is no fundamental escape for Bristol. The cessation of trade would have a catastrophic effect on dock employees and workers and for large and small businesses throughout the city that turn on the port's activity.
It cannot be said that Bristol has not attempted to help itself. Every economy has been made within its reach and every attempt has been made to attract new business. Long drawn-out discussions are still taking place between the local authority and the Department of the Environment on adjustments that might be made to the rate support grant or to grant-related expenditure. Bristol has brought in expert accountancy and financial advice—in this instance, the well-known firm of Coopers and Lybrand. The last meeting was on 26 January and some of the Bristol Members on both sites of the House were present. It is hoped that RSG adjustments and other measures may help the city's finances over a period, but this will be without an effect on the port's direct trading position.
The Government's attitude towards Bristol—it has been expressed so often in the past, especially by the Departments of Transport and Industry, that I know it almost by heart—is threefold. First, they say that help had to be given to London and Merseyside because they were special cases. The Minister adopted that argument and almost expressed Conservative pride about the help that has been given. The Government argued that the ports' finances would have collapsed without Government intervention. It is always said by Ministers that it does not really matter what happens at Bristol because Bristol always has its ratepayers to meet the debt.
Secondly, it is said that Bristol made its own hard bed in the 1970s when it decided to proceed with the new west dock, which is now known officially as the Royal Portbury dock, which was opened by the Queen about two or three years ago. It is observed by Ministers that Bristol, having made its bed, must lie upon it.
The west dock was debated in the House shortly before the 1970 general election. Labour Ministers, especially Mr. Richard Marsh, as he was then—I believe that the same attitude was adopted by Mrs. Castle when she was responsible for transport—resisted the proposal to build a great new modern dock in the west. Indeed, it is one of the finest in Europe; it has everything except ships. Labour Ministers resisted the proposal but leaders of the then Conservative Opposition positively encouraged Bristol to go ahead.
In a previous debate I named eminent Conservative spokesmen, both right hon. and hon. Members—they were not all right hon. Members at that time—who encouraged Bristol to build the dock. There was an attempt

during the 1970 election to make it a big election issue. One of the local newspapers produced a picture of the west dock, as it was then called, with Bristol Labour Members being hanged from the cranes over it because they were not showing enough enthusiasm for the port extension. No doubt that was good party fun at the time, but now Ministers are saying "It is Bristol's fault and it should not have placed itself in this difficulty." The truth is that the dock was a fine example of municipal enterprise but Bristol has had to suffer for it ever since.
I do not wear a white sheet because like all Bristol Members, both Conservative and Labour—I think that there were five Labour Bristol Members at that time—I wanted the dock. Bristol as a whole wanted it; but it was encouraged by national leaders of the Conservative party even if Labour Ministers tried to dissuade us from going ahead.
Thirdly, it is said that it is the Government's general policy to treat ports as commercial bodies free to compete without Government intervention. If that is so, I do not understand why they have introduced the Bill. Surely it gives the lie to the Government free enterprise doctrine, if it be one.
Ports cannot move about. They are subject to adverse outside forces. One cannot talk about competition between ports in the way that one talks about competition between grocers' shops. That argument is irrational. Also, there are other factors that must be taken into account in addition to adverse trading conditions. I have a long document from the British Ports Association which deals with the European regional development fund and the maximum grants available from the EC to assist ports. They vary enormously from over £1 million in Workington to much less for other ports. The different grants vary, no doubt, according to the judgment of those who administer the European regional development fund. Bristol does not appear because it is not a development area and does not have special development area status. The Government want assistance from the EC to be confined to those ports within special development areas. Whichever way one turns, it seems that the die is always loaded against Bristol. It is nonsense to talk about free competition when the ground rules cannot possibly be the same.
I have made my point about Bristol in the past and I shall continue to do so. I support the Bill and approve of the help that is to be given to London and Merseyside. If the arguments are sound for those two ports, they are equally sound for the port of Bristol. It is unfair that normal local government amenities, repairs and renovations should be weakened to support a port which renders service not just to Bristol, but to the whole country.
The port of Bristol is situated at the junction of the M4 and the M5 motorways. Were trading conditions now as they were 12 years ago, Bristol would be doing very well. I believe that the new dock, Royal Portbury, will do well in the future. That is why the Government should intervene to give some special and direct help to the port of Bristol.

Mr. Keith Wickenden: I have a substantial interest to declare. I am chairman of the port of Felixstowe. The port is owned by the European Ferries group of companies. It owns also Larne harbour in Northern Ireland, Harwich Navy yard and Cairrnyan in Scotland. I agreed with the hon. Member for Aberdeen, North (Mr. Hughes) when he said that the House would


have reservations about the proposal to write off these sums to the Port of London Authority and the Mersey Docks and Harbour Company. I share those reservations, but, I suspect, for different reasons. The hon. Gentleman, other Opposition Members and some of my hon. Friends, I suspect, disapprove of the writing off of these sums unless similar sums are made available to ports in their constituencies. I disapprove of the writing off of these sums because I do not believe that any such sums should be written off to any port; they should all compete equally.
The port of Felixstowe, which is the largest independent port, the largest container port and the only port which has grown during the past four years—I shall give what I see as the reasons for that later—has no loans of any sort from Government sources. When it was acquired by the European Ferries group in 1976, it had a small amount of Government loan bearing interest of up to 16 per cent. All those loans were repaid immediately after the takeover. Since that time, the company has funded a major expansion programme of no less than £30 million during a period of recession. It has been funded entirely from private sources. The works to which those loans have been attributed have not been sufficient to cope with the demand in traffic and the port is now considering a further expansion of a similar amount.
It is a surprising story when ports worldwide are going through a difficult period. It is perhaps worth examining why that is. I shall give a few figures to show how the growth has taken place during the past four years. In the year ended 31 December 1978, the port of Felixstowe handled 180,000 containers. In the year ended 31 December 1982, it handled 460,000 containers—an increase of 250 per cent. The total non-oil tonnage passing through the port increased from 4·5 million tonnes in 1978 to 6–5 million tonnes in 1982—an increase of 50 per cent. Perhaps most importantly of all, during the same period the work force increased by 25 per cent. There are lessons to be learnt from that. I should not deny for one moment that Felixstowe has been fortunately placed geographically. It has been able to take advantage of the growth in our trade with Europe, which now accounts for 64 per cent. of our world trade. Nevertheless, major shipping lines such as United States Lines Operations Inc, Sea Containers, OOCL and Evergreen Line bring their containers into Felixstowe, passing the ports of Liverpool, Bristol, Southampton and London, and two thirds of the traffic of one of those operators returns to the north-west.
There are several reasons for that. Shipping companies, because of the size of container ships and bulk carriers, are now heavy investors in capital. They cannot afford to have their ships tied up even two hours longer than necessary. A ship costing £20 million to £30 million is a valuable asset. It must work to achieve a return. The port of Felixstowe handles its containers with up to 300 per cent. greater productivity than other container ports. There is no such thing as an out-of-date container port. All container ports by definition are modern. There are several reasons for this success. One is a highly intelligent work force, which co-operates fully in large investment programmes and new equipment and has never resisted such matters. Another reason is that the port has a management—I speak about others and not about myself—which is open to the work force at all times. That is very important in the ports industry.
My hon. Friend the Member for Ludlow (Mr. Cockeram) said that the head office of the port of Liverpool was eight miles from the scene of operations. If that is true, it is an appalling state of affairs.

Mr. Heffer: It was the centre at one time.

Mr. Wickenden: That may be so, but one cannot go on operating from the same office for ever. At one time, Felixstowe's head office overlooked the dock basin. It does not do so now, because that would not be an appropriate location for it. The office has been moved.

Mr. Palmer: Felixstowe is often talked about in Bristol. The hon. Gentleman argues that Felixstowe's relative prosperity has been based on its own efforts and that there has been no outside assistance. In that case, how does the hon. Gentleman account for the article in Lloyd's List on 1 February this year under the heading:
Port seeks EEC funds to expand"?
The article says:
This month the Transport Committee of the European Parliament will consider a suggested £30 million extension of Felixstowe port and decide whether it warrants a contribution from EEC funds. This and £4·9 million worth of Harwich improvements may be put on a priority list for possible grants of around 25 per cent. Mr. Amedee Turner, Member of the European Parliament for Suffolk and Harwich, said he would be supporting these projects very strongly. He pointed out that help from Community funds for the area was already substantial.
How does that square with what the hon. Gentleman has been telling us?

Mr. Wickenden: I do not know. No application has been made by the port of Felixstowe to the EC, whatever Lloyd's List may have said. The administrators of the EC regional development fund sometimes offer grants without being asked, but no application has been made by the port of Felixstowe and no application will be made. We have completed surveys of our plans and I suspect that they have been considered by the EC, but the suggestions that the EC will make any grants available, or that they would be accepted if offered, are far from the truth. We expect to raise the funds for any development from normal private sources.

Mr. Palmer: In that case, perhaps the hon. Gentleman will write to Lloyd's List to explain the situation.

Mr. Wickenden: I shall be delighted to do so. Indeed, no application could yet have been made, because no plans have been finalised and we do not know how much the development will cost.
The hon. Member for Liverpool, Walton (Mr. Heifer) intervened in the speech or my hon. Friend the Member for Ludlow to refer to the old method under which dock workers were employed. We in the port of Felixstowe are fortunate because we have never operated under the old casualisation system. It was an appalling system and I agree with everything that the hon. Member for Walton said about it. The system degraded men, and a civilised community should never have countenanced it.
I am proud to say that we never had that system in Felixstowe. My distinguished predecessor, the late Gordon Parker, set his face against it when he started the port operations in Felixstowe. His prime insistence, even though he could hardly afford it in his early days, was that every man should have a guaranteed weekly wage. 'We have followed that tenet faithfully ever since. Because we


never had the old system, we do not have the history of bitterness which understandably exists in the areas that operated that system.
Past management in the docks industry has been inept, to put it at its kindest. It is no wonder that many sectors of the work force in many ports still bear the scars of those days. We have good labour relations at Felixstowe. That is why the port has been so successful. That lesson needs to be learnt elsewhere.
For example, Felixstowe handles twice as much non-oil traffic as Southampton, with one third the number of dockers. Southampton is a modern, well-managed container port, but it is living in the past and failing to compete. It may be claimed that we in Felixstowe are working our men too hard. If that were true, one would expect us to have a history of industrial disputes. We do not have such a history and our men earn, on average, twice as much as those in Southampton. I cannot give comparable figures for the Port of London Authority or Merseyside, but I suspect that they would be even more striking.
When the hon. Member for Aberdeen, North opened for the Opposition, he referred to the grid system of shipping and to a report which has given four criteria on the basis of which shipowners are said to pick a port. Those criteria are the inland distance from the markets to the port, the cost of transporting goods on the land side, the pricing strategy of shipping companies and the length of the sea crossings involved. Those matters are all important, but the most important criterion is the efficiency and, above all, the reliability of the port. If a shipowner can be certain that his ship will be turned round efficiently and relatively cheaply he will use one port rather than another, even though those four other factors may be against it—as they are in many instances in the case of Felixstowe.
The hon. Gentleman also referred to the flotation of Associated British Ports—formerly the British Transport Docks Board. He raised one or two interesting and somewhat contentious issues. He said that the premium that became payable in the days following the flotation was far too high. He referred to an issue price of 112p and a market price of between 140p and 150p. By most standards, that is a modestly successful issue, but not a tremendously successful one. It may be wise to compare it with the case of a company called Superdrug which came to the market a few days later. That company was very much smaller than Associated British Ports but it attracted twice the amount of subscription money and went to three times the premium.
The hon. Gentleman said that an over-subscription of 30 times was astonishing. It was not really astonishing. My company applied for a million shares. We got 28,000 and we should have been horrified if we had got more than 50,000. I suspect that many other institutions in the City of London applied for many times the number of shares that they wished to acquire.
The hon. Gentleman also referred to the need for a corporate plan. I do not believe in corporate plans and my company has never had one. Such plans take months to prepare, are usually out of date by the time that they are prepared, and are totally inflexible. The only corporate plan that is any use is the one in the minds of those whose duty it is to administer the business. The word

"administer" may not be appropriate because I am also thinking of the work force which is just as important as management in devising plans in industry. To reduce such plans to writing is to produce a sterile document which is often meaningless.
The hon. Member for Bristol, North-East (Mr. Palmer) referred to the way in which the European regional development fund was allocated. I do not know how that fund is allocated among ports on the United Kingdom mainland, but I know how it is allocated in relation to Northern Ireland, and the method is astonishing.
Some years ago the European regional development fund allocated about £2 million to Northern Ireland ports. It was not asked to do that. It gave the job of deciding how that money should be divided to the Department of Commerce in Ulster. It is interesting that the Department of Commerce decided that the right way to allocate funds was on the basis of the debt structure of the companies involved. As a result the port of Belfast took almost all the money available. The port of Larne—I declare my interest, because my company owns it—over many years has been extremely prudent and ploughed back all its profits into reserves and reinvestment. It has no debts and consequently received no part of the grant. I do not object to that, because I do not approve of regional development funds. I think that they create unemployment. That is a different matter, which I shall not go into today because it would be far too contentious.
I have said why I believe that ports should stand on their own feet like any other business. They must do so because ports, like any other business, compete in an international market. If one does that, one must compete with the best in that market. We shall solve the problems of ports and industry and of the closely associated unemployment problem only when we learn that we cannot succeed unless we produce goods and services which people in other countries want to buy. We can give all the grants that we want, we can provide all the regional training schemes, but if people will not buy our goods and services, we shall never permanently solve the problems.

Mr. Ted Leadbitter: I appreciate the time spent by the hon. Member for Dorking (Mr. Wickenden) on the achievements of Felixstowe, but he is now discussing matters about which he must be frank with the House. Does the hon. Gentleman support the Bill or not? Does he support the aid to London and Merseyside or not?

Mr. Wickenden: I do not. If the Opposition forced a vote against the Second Reading, I should be in a difficulty. However, since I have such a direct and substantial financial interest, it would be improper for me to vote, if it came to a vote. If I had to choose, I should vote against the Bill simply because it offends every principle I hold.
I hoped that the hon. Member for Newham, South (Mr. Spearing) would be called to speak before me, because I understand that he intends to discuss ship repair yards in the port of London. The hon. Gentleman is more competent than Ito deal with that subject, but he has asked me to observe whether there would be a requirement for an efficient ship repair yard within the port of London. My answer is, "Yes, there most certainly would be." My company, which owns 25 ships—repaired in a number of places, but mainly in Newcastle, Clydeside and in the northern ports of Europe—would welcome an efficient and


competitive ship repair yard within the port of London, provided of course that it was efficient and competitive. I am sad to say that in ship repairing and shipbuilding too often we are not competitive.
I do not wish to score a point, but I have looked at competitive tenders for work on my company's fleet. The tender from Britain is £12½ million. The lowest tender, from Holland, is £7½ million. One might consider subsidies and unfair competition, but one does not need to go as far as that. The answer lies in the time estimated to do the job. In the British yards it would take 320 days and in the Amsterdam yards 140 days. I do not know the reason. Perhaps it is lack of investment, bad working practices or rotten management. I do not know. What I do know, however, is that once again a valuable order will be lost to Britain which need not have been lost. If, in the hon. Gentleman's constituency, there is the prospect of creating an efficient and competitive ship repairing yard, my company will certainly welcome it, as I believe will every other shipping company based in Britain.

Mr. Donald Dewar: I shall be brief, because I am, to some extent, an interloper, as I do not come from either Merseyside or London.

Mr. Nigel Spearing: Yes.

Mr. Dewar: I hope that I am not rubbing salt into any wounds —

Mr. Spearing: My hon. Friend is.

Mr. Dewar: I should like to say a few words about the general principles lying behind the Bill. They are of general importance. It is right that hon. Members should consider them even if they have no local or constituency interest to declare. I do not under-estimate the problems that have afflicted the ports that will benefit the reduction of debt that the Government are empowered to make by this legislation.
I take the point made by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) when he said that he thought that there might be some representatives from other areas who would express anxiety about the manner in which the crisis was being isolated by the Government and how the ports of London and Liverpool were being examined as one specific case that required help and was distanced from the general problems of the ports industry.
I recall the proceedings on the Transport (Finance) Bill that dealt with London and Liverpool. Before this debate I took the trouble to read some of the speeches made on that Bill. The Minister, referring to the two ports concerned—I think it is arguable—said on 24 November 1981 that
there was an immediate crisis of unique size and scale in these two ports and that in no other port was it the case that the only way of tackling those problems was by means of Government funding."—[Official Report, 24 November 1981; Vol. 13, c. 767.]
In other words, the suggestion was that London and Liverpool had problems that were not seen in other ports and that they had therefore to be treated on a special basis. We should also be grateful for the Minister saying that he thought it was
unthinkable that the ports of London and Liverpool should simply have been left to go to the wall."—[Official Report, 24 November 1981; Vol. 13, c. 766.]
I suppose that all Labour Members—I stress Labour Members—would take that view. I do not doubt the

sincerity of the speech by the hon. Member for Dorking (Mr. Wickenden). His remarks make clear that there would be a strong move for saying that ports that cannot make a go it should be left, in the Minister's phrase,
to go to the wall".
In the same debate the hon. Member for Wellingborough (Mr. Fry), whose remarks may be recalled by London Members, said that
everybody knows that the Port of London is dead, and the problem is that we have to pay the corpse millions of pounds of taxpayers' money because it will not go away. It is high time that the Government settled the Port of London problem, grasped the nettle and accepted that the port is finished."—[Official Report, 24 November 1981; Vol. 13. c. 814.]
That is tough talking. It underlines the wisdom of saying that we, at least, on the Labour Benches are grateful for the fact that the Minister sees that a rescue operation is necessary. I do not wish to labour the point but this kind of rescue operation is getting unpleasantly near for a large number of other ports. The fact that a package has been put together for Liverpool and London consumption leads to certain strains. My hon. Friend the Member for Aberdeen, North described certain irritations in other parts of the country. We have also heard about Bristol.
I wish to draw the attention of the House to problems on the Clyde, one of the great traditional ports of this country. It is a major port and the only significant port on the west coast of Scotland. It has seen its trade and viability undermined over the years, partly by geography, partly by the general economic recession that has attacked everyone, and partly, almost, by the accident of economic happenings.
A dramatic example of this is a bit of bad news that comes from much good news. The North sea oil industry has greatly affected the Clyde Port Authority and its finances. Finnart, the great terminal that was built by BP in 1977–78, took in 12 million tonnes of oil. In 1981 it landed not one tonne. Although there has been a modest recovery since then, the significant revenue that came from that development we shall not see again for a long time.
As a Scot, I would be rather ungracious if I were churlish about the discovery of oil in the North sea, but it has had unexpected and unfortunate side effects in my port. I can give a number of other examples. For example, the granary was one of the great revenue earners for the Clyde Port Authority. This year, the whisky industry is buying more and more of its grain from the domestic market. This has rather sinister overtones for the financial stability of the Clyde Port Authority.
We all know about the general shipping problems, and I do not wish to weary the House with too many statistics. However, in 1976 there were about 10 companies and 13 services plying regularly out of the Clyde. Now we have a spanking new container terminal, but there is only one company using it, Hapag-Lloyd. We had, among others, Manchester Liners. We lost Sea Trains when it went to the wall, and the result has been a complete undermining of the revenue that had come to the port authority from the container terminal. It is horrible to think that 10 years or so ago there were over 2,000 shipping movements on the Clyde, but last year there were only 112. We have seen a collapse from about 1·6 million tonnes of general cargo to under 500,000 tonnes.
The problem is that there is little in the immediate future that gives us cause for hope or optimism. One of the great issues, rightly, of Scottish politics at the moment is


the future of the Ravenscraig steel strip mill. People rightly point out that this has an influence not only on the steel workers in Lanarkshire but on the jobs of people in many other parts of the country. For example, the ore from Ravencraig comes in at Hunterston, and provides revenue of about £1·5 million for the Clyde Port Authority. The Under-Secretary of State for Transport will not know this, and I do not criticise him for that, but Ministers in the Scottish Office will know that if Ravenscraig goes to the wall—and there are still worrying question marks as Mr. MacGregor runs amok across the steel industry—one of the inevitable casualties will be the Clyde Port Authority because it cannot stand the loss of that income that it enjoys at the moment.
The employment results of the picture that I am painting have been devastating in the docks industry. Two years ago there were more than 550 registered dock workers on the Clyde, but at the moment there are only 130. The Clyde Port Authority, for reasons that I can understand but deeply regret, is looking for a further reduction of 40, which will reduce the number to only 90, an extraordinarily low figure given the position that the port once held in the economic life of Scotland.
If we are talking about the unique crisis in London and Liverpool, we should remember that, despite good housekeeping, a great deal of flexibility and the remarkable co-operation of employees in what is happening to their jobs and prospects, the Clyde Port Authority is making substantial losses. In 1979 there was a surplus of £2·5 million. In 1981 there was a loss of £870,000. Because of the efforts that have been made, that figure will probably be reduced to £400,000, but we have not yet seen the final figures. However, there will be a substantial loss. There are many storm signals on the horizon for the port and for the Clyde generally.
The problem worries every one of us. I can remember, and I am not yet of pension age, when one looked around the Clyde and it was self-evidently a busy port. There is almost an eerie feeling now, crossing the bridges in the centre of Glasgow, because suddenly one thinks that those days are back again. If one looks down the Clyde, the quays are lined with ships, but they are ships that are laid up and parked, riding out, possibly unsuccessfully, the appalling recession, particularly in the bulk tanker and bulk carrier trade. There is almost nothing happening in shipping movements. The irritation to which my hon. Friend the Member for Aberdeen, North referred is shared not just because we are worried by the Government saying "Here is a rescue package for two ports. For the rest, the devil must take the hindmost." Apart from the general economic implications of that policy, there are also real worries and tensions for individuals who are caught up in the situation. I do not want to embarrass an individual constituent by mentioning his name, but one of my constituents, who I know extremely well and who has been helpful and supportive to me as a constituency Member of Parliament, has just been made redundant by the Clyde port authority after 23 years' service. He is a clerk, not a registered dock worker, and that is one of the problems. The result is that near to the age of 50 his job prospects in the present economic climate of the west of Scotland must be very doubtful. I do not want to depress him by putting it more strongly. I think that he is realistic about it.
The relevance of the scheme is that if that man had been made redundant in exactly the same job in Merseyside, for example, because of the rescue package which has been put together he would have been treated as a registered dock worker for severance terms and would have got the £22,500 which is on offer at the moment. He will not get that because he is on the Clyde and is treated as not being in the official scheme as a registered dock worker. As I understand it, though my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) will correct me if I am wrong, there is a considerable differential in Glasgow which would not exist if it was in Merseyside. I have been told that by a number of people who are engaged in the docks industry.
Even supposing, for the sake of argument, that that rumour cannot be substantiated, the very fact that the rumour is rife and that we have this kind of tension and difficulty underlines the problems of taking a port scheme of the kind that we are discussing and looking at it in isolation.
In the Second Reading debate on the Transport (Finance) Bill, the Minister told the House:
The Clyde has reserves. It is not faced with a threat to cease trading."—[Official Report, 24 November 1981; Vol. 13, c. 838.]
Technically, that is probably true. I am not suggesting that the Clyde Port Authority will go bankrupt in three months or even in two years. But we have seen its trade and its level of activity quietly subsiding and running down to the point where it is in an extremely dangerous state of health.
We see a great city and port being left a mere shadow so insubstantial as almost to have no reality left.
It would be unthinkable, to quote the words used about London and Liverpool, if at some future date the Clyde no longer operated as a port and we had no major port facilities on the west coast of Scotland. I put it down as a marker. It is very important that we bear in mind, while not being unsympathetic to London and Liverpool and while welcoming what has been done to help them, that this is not the end of the story. Other ports whose localities are equally significant have an equally important part to play in our economic regeneration and recovery. We must not leave them unaided and unmourned if the hard times continue and intensify, as some of us fear they will.

Mr. Nigel Spearing: Those of us in other parts of the country will understand the dilemmas of our Scottish friends, particularly as the further north and west one goes, the further one goes from the world terminals of the north-west European seaboard.
I commend parts of the speech of the hon. Member for Dorking (Mr. Wickenden). His views on the ideas of workpeople would obtain the wholehearted appreciation of Labour Members. I agree with him about corporate plans; they can be paper monstrosities. Those that were produced to satisfy the whims of Whitehall or the mandates of the Ministers by the Port of London Authority were particularly pie in the sky. I have played my part in criticising what I thought were not very helpful documents.
When we vote money we have a right to scrutinise. Tonight I want to consider some aspects, and one in particular, of the activities of the Port of London Authority. I find myself in a curiously anomalous position. Normally Labour Members approve public enterprise,


public bodies and the public servants who serve those bodies, and are somewhat critical of some aspects of private enterprise. Here I find myself in exactly the opposite position, championing two private enterprise firms in my constituency—one in particular, which I shall mention in a moment—and strongly criticising the Port of London Authority, which is wholly accountable to the Minister. If what I say proves logical, coherent and correct, I hope that the Minister will respond with alacrity, if not now, certainly in Committee, because it is his Government who champion private enterprise and who see quangos as animals to be cut down and put in place. The PLA should not be cut down; it should be run properly and well.
As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) said, this is the fourth time round the course. In May 1980, we had the Port of London (Financial Assistance) Bill, in March 1981 we had the Ports (Financial Assistance) Bill, and last year we had the Transport (Finance) Bill, as mentioned by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). On each occasion, I said that we should be round again and calling for Select Committees. It has been clear from Ministers' speeches and the terms of the Bill that the Government have not got to the root of the problem in London. Previous Ministers have refused a public inquiry. They have even refused an amendment in the Port of London (Finance) Bill for the PLA to consult local authorities about some of its activities.
The Government have said that the PLA needs to cut its manpower to achieve viability. Indeed, the long title of the 1981 Bill had that assumption built in—facile and foolish as we said that it was. There are many other factors for success. We have said in all these debates that one can cut manpower as much as one wants, even to the point of extinction, but that there will still be a capital debt. We said that three years ago, and here we are—capital debt going down.
It was said in a letter to my hon. Friend that the reduction in PLA interest this year will be £6 million, which will just bring it into the black in this first year on its own, 1983. So it is only by means of this Bill that the PLA will go into profit of perhaps £2 million. The Government have now done exactly what we said had to happen—instituted some form of capital reconstruction.
However, there is still the question of continental competition, the Touche Ross factor—which I shall not explain, because informed people know what it is—and the possible effect of the grid. I do not know whether the grid operates on an international basis as well as a national basis, but I suspect that it does. If it does, it will bring the extinction of certain British ports even nearer than otherwise would be the case.
The final factor is the quality of management. Even if all these factors were controlled and put into place, would the management be up to it? I am not sure that I can say yes in the case of the PLA.
I do not suggest that the royal docks should remain open to handle general cargo. The days of the royal docks, Liverpool and Glasgow as ports as we used to know them, have gone. However, there are some important aspects of the way in which the authority has dealt with the problem of the royal docks. The royal docks cover an area of about 500 acres. They are as big as Hyde park and Kensington gardens put together and are filled with buildings, workshops, warehouses, welfare centres, three dry docks

and an 800 ft lock, taking ships drawing up to 40 ft if necessary. They are being let by the PLA to small firms on short leases—all sorts of people doing all sorts of work. At least 680 people work in the royal docks, but their activities have nothing to do with the water. They are not allowed to use the water. The PLA restricts them from using the water even though it takes their money for the rental of the workshops, offices and yards where they store containers and so on.
Ten firms would like to use the water, but they cannot. There has long been a suspicion in east London that the PLA has deliberately run down the royal docks and that the structure of charging has discouraged their use. It has been difficult to pin down any evidence of that, but I wish to draw to the attention of the House some evidence that I have from one firm that got in touch with me some years ago. That firm had to move out of the Millwall docks and could not get accommodation in the royal docks even though the warehouses were there ready to let. I persuaded the PLA to give that firm accommodation. It is a successful firm run by a Mr. Ralph Hilton whose activities would gladden the Prime Minister's heart. It was given warehousing on the south side of the George V dock as a groupage undertaking. When he took me round, Mr. Hilton explained that the company was able to provide the customer with a combination of services that could not be obtained elsewhere and 1: shall not disbelieve him. So successful was the firm that it found itself short of space. More than that, it wisely decided that it would be a good idea to use the dock. The company was on the south side of the George V dock—the last dock to be built in London other than the Tilbury extension.
The company applied to the PLA and negotiations continued for over a year. The PLA would not allow the company to bring a lighter, a coaster, or a ship of any sort into that dock. I got in touch with the PLA, which was supposed to be interested in keeping the dock going. This was long before it was decided to take out general cargo. When I asked why, I was told that there was some labour problem. It tried to fob me off with an explanation that it was something to do with the unions. Indeed, in a previous debate on this topic I was sufficiently ill-advised to say that there was some problem with labour. However, when I went to the unions, they said that they would like to see registered men with Mr. Hilton. In the end, after a year's negotiations, the PLA offered Mr. Hilton an agreement. I want to read some of the terms of that agreement because they show the way that this public authority goes about its business.
The contract is prefaced by the words:
These terms will be supplemented by such other terms and conditions as the PLA's Solicitor may require".
Any business man signing such a contract would need to be very careful indeed. I hope that the hon. Member for Dorking will confirm that. It is an open invitation for conditions to be changed in any way whatever. That is not a good way to go about business. The agreement also says:
The licence will be granted for a period of 6 months and will be subject to termination at any time by either party giving to the other one month's notice in writing.
Is it likely that a person would contract for lighters, for ships, and make an arrangement with a shipping company when the PLA is able to give a month's notice? That is what it did to Hilton Amalgamated Transport Ltd.
Condition 5 states:


The Company's activities will be restricted to import and export cargo which is either new or returned traffic that has left the Thames for at least a minimum period of 3 months".
That is for a groupage depot. How can a contractor know what are in boxes that are going inside boxes in his yard? That was in a letter from the PLA dated 20 August 1981. It was quite determined not to let ships into the royal docks to reach a flourishing and expanding business.
Hon. Members know that east London has the river as a centrepiece and that that part of our city is being rebuilt. The Government have created the London Docklands Development Corporation for that purpose. It is not a very good agency for doing that, but it is a statutory body. The London borough of Newham contains half the area of docklands and the GLC has a strategic planning function. These docks recently had many uses. There were two scrap iron depots exporting large quantities of scrap iron, although the PLA said that they did not come up to forecast. An application is pending for an airport that might take up some of the quay space. It has yet to be determined whether that is compatible with dock uses. A possibility exists for recreation. If the PLA had been more co-operative, recreational facilities for young people in those docks could have been created long ago.
I shall not burden the Minister with a summary of a paper that I have written on this topic called "The Royal Group of Docks Study". It contains appendages to a report produced by the royal docks study group for the London Docklands Development Corporation. I am not in favour of all the report's contents, but the report was produced for further discussion to examine how the future use of the docklands area would benefit London and especially east London. Just before that report was published last October the PLA announced that it was closing water access to the dock. It said that it was losing up to £0·5 million a year.
The PLA had, at the suggestion of one of its tenants, taken ships to lay up in the docks, as was happening in Glasgow. Nine or 10 medium-sized ships were providing an income for those docks. The PLA had taken money from a British shipowner for charges to 31 March this year. It wrote quit notices to all the owners. The attitude was not "turn down", but "turn out". I do not know of a port authority these days that can afford to do that with any shipowners. The position was worse than that. Half of the ships were owned by Greeks. The Greek mercantile marine is twice the size of the British mercantile marine. The British mercantile marine, especially general cargo vessels, is being decimated. It is in a serious condition. The Greeks are twice as important as the British in world shipping. As most Greek ships are chartered in London, most Greek shipowners either have agents or their own offices in London. I see that the hon. Member for Dorking agrees with me. The Port of London Authority has been telling Greek shipowners to take their laid-up ships out of the docks at three months' notice. Those ships were put there on the expectation that the would stay there until the recession ends. They have come from all over Europe. One ship came from Alexandria to be put into that dock.
The PLA told one of the biggest shipowners in this country to get out too. As a result of that inept move a meeting was held in the House in November 1982 between myself as the constituency Member of Parliament, representatives of the shipowners, the London borough of Newham and a ship repair firm.
I am sorry to say that the exchanges were heated and one senior member of the PLA management spoke to those important people, including marine superintendents, as though he were in the 19th century. That is not good enough. Fortunately, however, an agreement was patched up and those ships will stay there, but only until 31 December 1983. However, although it would be advantageous to lay up ships in the royal docks and although there is plenty of room, I cannot see many shipowners using them, because they may be turned out on 31 December 1983. Therefore, the PLA may be losing some revenue on that account.
What about the scrap iron exports? Those companies were told to get out by 31 March 1983. Nevertheless, last year a ship left the dock with 20,000 tonnes of scrap iron on board. I saw another ship this morning with 16,000 tonnes. The PLA cannot be losing money over that. Indeed, the claim to be losing £500,000 was never substantiated. We asked the PLA officials at the meeting in the House on 19 November to substantiate it, and they could not. Nevertheless, a public statement had been made to that effect. Of course, we knew how much income was being obtained and we had some idea of the out-of-pocket expense of pumping water into the dock and manning the lock, as distinct from the expenses of the dock as a whole, which would continue whether or not there was water access. That great public authority was unable to substantiate its claim.
The history of ship repair is even worse. In the past two or three years the history of ship repair on the Thames has been very sad. On 21 December 1979 the House devoted a whole hour to an Adjournment debate of mine on this topic. I shall not weary the House with its contents. However, ship repair is based on the system of plunder, and has been for 1,000 years. That is understandable: it is human nature. Apart from when there is a recession, a shipowner wants his ship quickly so that it can carry its cargo. Therefore, he is prepared to pay what it will pay him to pay and not what the job costs. Ship repair on the Thames, with its great tradition of cargo ships, has certainly been carried out on that basis. Certain practices were built up on both sides that were not particularly wholesome.
However, for all practical purposes the ship repair industry on the Thames disappeared for nearly a year, until the PLA woke up and at last enabled one firm to go into Tilbury docks. The PLA also allowed another firm into the royal docks. I refer to Thames Ship Repair Services, a new firm formed by an ex-marine superintendent of one of the large shipping lines, Mr. Cochran, who knew his job and had been through it from top to bottom. In modern British industry, that is an important principle. A few people in the City should learn that, unless someone has been through an industry from top to bottom, he will not necessarily know much about the job. However, this chap recruited men whom he claimed could—I do not say that it is true—through their experience, bring new insights and a new method of working to ship repair in Britain.
I wrote to the Secretary of State for the Environment, setting out some of the ways in which that firm satisfied the Government's requirements. It was a small business that wished to start up. It would employ men in an area of high unemployment. It had some guarantee or other from the Department of Trade and was doing all the things that Ministers tell us time and again firms should do. So Mr. Cochran went to the PLA in March last year and said


"Please may I use the dry dock? I should like to tender for some ship repairs, particularly Sealink and European Ferries. I believe I can do a better job than the people on the continent." I am not saying that he could, but he believed that he could. After what I have said already, the House will not be surprised to learn that the PLA kept him waiting for nearly a year before a contract was offered.
The PLA's first excuse was that there had been some problem with the unions—some involvement with labour. Mr. Cochran tried to sort out the problem and it took three months. He came to me in September last year complaining about the lackadaisical approach of the PLA, because he was wishing to put in some tenders. I got in touch with the PLA and tried to find out what was going on, but in October the PLA announced the closure of the dock, so that the dry dock was then not available.
After a year I suggested to the PLA that it might like to reconsider giving Mr. Cochran the dry dock. The PLA agreed and sent him a draft contract, which I have here. It put up the lock fees by 700 per cent. for the sort of vessel that he would need. The union difficulty had disappeared but instead the PLA wished to charge him £25,000 a year for two men to be standing by between 7 am and 3 pm. The work on the crane and on the dry dock was not to be done by PLA men but by Mr. Cochran's men, but there was an agreement with PLA engineers—understandably with the unions' agreement—that the maintenance was to be done by PLA men, so two had to be standing by, and £25,000 was the charge for a year. There was also £500 a day for each ship over 200ft in length. I am not sure whether that was the market price, but the point is that if he had not used the dock no one would have used it, and £500 a day, even for the PLA, is not to be sniffed at.
Even if the terms had been better, the coup de grace—I remind the House that in ship repair a quick turn-round is needed—is in the words:
Serving a Requirement Notice not less than 2 weeks before a vessel is due to leave or enter the Royal Docks.
Two hours might be reasonable, or perhaps even two days, but certainly not two weeks. How could a ship repair firm go to one of the firms of the hon. Member for Dorking and say "We are sorry but we cannot guarantee to get a ship in without two weeks' notice"? It is ludicrous in the extreme. Either the PLA does not know the ship repair industry, which it is its duty to know, or that draft agreement was meant to be impossible—and impossible it was.
Mr. Ian Cochran, having battled with the PLA for a year, has this very day moved his workshops and his men—admittedly not many at the moment—to the royal docks at Chatham, where he has a much larger workshop and more dry docks, hired from the Property Services Agency. Good luck to him. What annoys me is that my constituency, with a long history of ship repair, of apprenticeships and of employment, has lost that work. The three dry docks in the area could become a good industrial centre, but the chances of revivifying them have gone, not because there is not a man willing to take them on or because he did not want to stay but because the PLA has made it impossible for him to do so.
The chief executive of the London borough of Newham wrote to the chief executive of the PLA on 28 December, before the decision was made. He said:
Our fear indeed is that your Authority's attitude, if it has been correctly reported, might well indicate a general intention on your part to restrict water access to the Royals which are still capable of making a valuable contribution to employment in the

area in spite of the discontinuance of your own cargo operations. I should be glad to have an assurance that you will take whatever action is necessary to enable Thames Ship Repair Services to carry out activities in accordance with the agreement they signed with you last April, including the use of the dry dock, and that pending longer term decisions on the future of the Royal Docks as a whole, you will do nothing which would interfere with or restrict job generating activities within the area.
The PLA has the cheek and audacity to say that it is not closing options. It has said, "Oh no, we can open up the docks and the gates if there is a need to do so."
The Minister has a special responsibility in this respect. As a Member of Parliament, I have dealt with the PLA for nine years. I knew of its activities both as a London Member of Parliament and as a member of the public for some years before that. I wish that I could say something good about the PLA but I find it difficult to do so and I have yet to find someone to counter my view.
I think that the Minister should put the following questions to the PLA. Does it wish to close the options or did it decide unilaterally to cut off water access'? Why, having been in discussion with the borough of Newham and the London Docklands Development Corporation to produce a report about its future, did it pre-empt that future itself? Can it provide detailed figures to sustain its claim that it had would have saved up to £500,000 last October if it has closed the dock? Why did the PLA refuse an offer from the GLC to guarantee the loss? To what GLC proposal did it take exception? I omitted to mention, Mr. Deputy Speaker, that the GLC offered to guarantee any losses that the PLA might make.
Why did not the PLA permit Hilton Amalgamated Transport Ltd. to develop waterborne traffic? Why did it make impossible conditions? Why did it say that union problems held up this arrangement and those of Thames Ship Repair Services when none, as it has emerged, existed? Why, after an initial helpful response to Thames Ship Repair Services in March 1982, did it make it impossible for the company to operate in any other dock? Why is it discouraging all water uses of the royal docks and deliberately foregoing revenue by turning out scrap dealers? Will it now extend the deadline for lay-up booths from 31 December 1983, and, if not, why not?
I have been impelled to speak plainly and with force about the PLA. As I said, I have watched the authority for some time. Unfortunately, I have met no one who has a good word to say for it. Until now, it has been difficult to bring to public attention a matter so specific as to demonstrate the widespread criticism and lack of public confidence in this important public body in east London. Tonight I have presented a case which I believe to be accurate and, if anything, an underestimation. Of course the royal docks can never be what they were 20 or even 10 years ago—sea trade and industry have moved on—but they can be an asset to east London, possibly for groupage activity, and for bulk terminals, particularly as firms want water access today because of increasing transport costs. Unless there is an indication of willingness on the pact of the PLA, who will apply and take an interest?
The PLA has scrapped negotiations with the London borough of Newham, the London Docklands Development Corporation and the GLC, and has snapped its fingers at them by taking its unilateral decision. It has snapped its fingers at the people of Newham and the dockland areas. It has deliberately and wantonly stopped the continuation of a skill that has been traditional on the Thames for hundreds of years. It has prevented the provision of the


facilities that are required and the employment that could be gained. I call that civic vandalism, because vandalism is damage for which there is no apparent reason.
Will the Minister ask the PLA those questions? There is a responsibility on him and on everyone else to ensure that we obtain answers from that body. The Minister has the responsibility—we all have some trusteeship. The PLA should persuade us that it is a fit body to run the port of London—let it try that, if it can.

Mr. Eric S. Heifer: I am replying to the debate on behalf of the Opposition because we felt that someone from Merseyside should put in his oar from the Front Bench. We have not done that for some time. That is not to be critical of my colleagues who have previously argued the case. It is a slight refresher to the scene.
It has been an interesting debate, and a number of important points have been made. The Under-Secretary of State pointed out that the proposals for £22,500 severance pay for those with more than 18 years' service would apply to all registered dock workers, irrespective of whether they were in the port of Liverpool or the port of London. That is an important statement. One of the great arguments has been that the payments agreed for Liverpool and London had led to difficulties in other ports that had surplus labour. Clearly the statement should help to relieve that problem.
Apart from that national declaration by the Government, we see no signs of any co-ordinated, cohesive policy on ports. The hon. Member for Dorking (Mr. Wickenden) summed up well the basic policies of the Conservative party—that ports should be prepared to compete with each other. That is the only philosophy of the Government. It does not matter what happens to some ports in various parts of the country, provided the principle of competition is there. If they are geographically in a difficult position, that is too bad. If they have to go to the wall, so be it. That is the Government's basic attitude. The Opposition do not accept it. It is deplorable. It is not what we expect from a Government trying to come to grips with the real problems in the ports.
The hon. Member for Liverpool, Garston (Mr. Thornton) referred to the years that he worked in the port of Liverpool. Although he is a Conservative Member and I am a Labour Member, we have that in common. I worked there for many years, not as a docker, but as a maintenance worker, for the port authority and for ship repairing firms and other firms along the line of the docks. I view the docks as someone who has earned his living in them. When I return to Liverpool, my home town, and see the docks, I realise that only 19 years ago, when I entered the House, the docks were thriving from the Dingle to Seaforth and along the stretch on the other side of the river. There is now mile after mile of empty docks. There is no movement of shipping. It is a sad scene. I do not think that anyone can understand the emotions of those who have been much involved in the work of the docks.
The dock workers were not a bunch of layabouts. They were not trying to put one over on the employers. They worked extremely hard. I used to see the old dockers stacking steel railway lines on a ship. I realised that if something went wrong and the line broke, the result would

be a tremendous whip-back and they would be dead in seconds if the line hit them. That is only one example of the sort of accident that could happen to dock workers.
We must understand why the problem arose at the ports of London, Glasgow, Bristol and on Merseyside. We must understand why the recession has hit these ports in particular. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) observed that some ports were doing much better than others. There is nothing magical about this. For example, the dock workers in Felixstowe do not form a more intelligent work force than workers in other ports. I do not believe that all the Felixstowe workers have an IQ that is 600 per cent. higher than that of any of the workers in Southampton, Liverpool, Glasgow or London. Felixstowe happens to be the port that is in the best postion for European Community trade.

Mr. Wickenden: rose—

Mr. Heffer: I shall develop one or two arguments before I give way to the hon. Member for Dorking. I usually give way readily, but I should prefer not to do so at this moment.
An interesting article in the January issue of Management Today stated:
All the large conventional ports of the developed world had serious problems in managing this transition"—
the transition from the old type of docking to containerisation and modern technological developments—
but nowhere have they been worse than in Liverpool. The Merseyside troubles have been exacerbated both by the decline in the economic hinterland of the industrial North and by the shift in trade away from the Commonwealth towards the EEC.
The article continued:
Liverpool does now have a large container terminal—1,100 metres of quay, five Panamax gantries and 48 hectares of land. Built by the Mersey Docks and Harbour Company to service deep-sea trade at a cost of some £50 million, it was officially opened in 1973 as part of the Royal Seaforth Dock complex, which also includes a grain terminal, timber berths and a meat berth, plus provision for substantial expansion in the unlikely event that the need should ever arise. However, the deep-sea sector has shown little movement because of the increasing orientation of trade in the 1970s towards Europe.
I can give another example about Liverpool in an article in The Times of Friday 21 January:
Although London has been in the headlines more, Liverpool has probably been the worst sufferer from the revolution in Britain's port industry.
It has been hit cumulatively by the container revolution, which has virtually emptied the Victorian dock systems of the cargo liners that filled them 20 years ago; by the shift to big ships that has deprived the port of much of the oil trade for which substantial new investment was provided in the early post-war years; by the decline in Britain's old-established heavy industries for which Liverpool was the natural outlet; and by the shift in trading patterns from the wider world to Europe and the accompanying shift of port traffic from Britain's west to east coast.
That does not apply solely to Liverpool—the point I was making earlier. It applies to Bristol, Glasgow, and all the west coast ports, including the south Wales ports. That is the reason. It is not the magic of Felixstowe. I do not deny that the hon. Member for Dorking may have the best management in the world in Felixstowe. He may have a highly intelligent labour force, but I do not believe that they are more intelligent than elsewhere. I accept that, from the word go, they accepted the principle of receiving a weekly wage, not the old system employed in the


traditional large ports before the National Dock Labour Board scheme, when skilled workers were treated like cattle.

Mr. Wickenden: The hon. Gentleman is making a thoughtful speech. If geographical position is the only reason for the switch in trade, why has Tilbury not done better? It is the best situated port in Britain for trade with Europe.

Mr. Heffer: Tilbury has done much better lately and is improving. The hon. Gentleman reminds me that I had some other figures from the Department of Transport—British Ports Association Port Statistics 1980. The figures are two years old. In 1970 the volume of trade through Liverpool was 29,314,000 tonnes. In 1980 it had reduced to 12,968,000 tonnes—a reduction of 52·4 per cent. The figures for the port of Manchester had declined by 31·3 per cent. and Clyde by 62 per cent. Felixstowe had increased by 58·3 per cent., Ipswich by 33·4 per cent. and Harwich by 24·6 per cent. London had reduced by 30·2 per cent., which was not as much as Liverpool, Manchester or the Clyde. That makes my point.
Once containerisation had been introduced, container ports had to be near the river estuary, not inland. Liverpool, Manchester and London suffered considerably because their ports tended to be inland. Therefore, container handling facilities had to be built on the point of the estuary. Tilbury is on the estuary and is now beginning to regain its work.

Mr. John Prescott: Is my hon. Friend aware that trade is being transferred from the Clyde to Felixstowe because shippers are prepared to offer the same price to take goods to Felixstowe as to the Clyde? That is due to the cross-subsidisation of the conference lines, which affects traffic flows.

Mr. Heffer: I am grateful for that information, and I am sure that there is much more such information which would underline the point.
It is important to examine the situation on Merseyside. A document distributed by the Mersey Docks and Harbour Company in January this year stated:
The Company has been hit due to: (i) the deterioration in South America trade because of the Falklands Islands war.
Many of us pointed out that Liverpool could be hit hard as a result of the Falklands war. The document goes on:
(ii) the imposition of import controls by the Nigerian, Mexican and Brazilian Governments. (iii) a deterioration in Chinese traffic. (iv) the continued depressed state of the U.K. economy having an overall effect on imports and exports.
I assure the House that those who run the Mersey Docks and Harbour Company are not rip-roaring revolutionaries or, as far as I know, even members of the Labour party, though perhaps a member of the board appointed from the trade union movement may be a member of my party. Who is responsible for the depressed state of the United Kingdom economy? It is undoubtedly the Government, who are not prepared to introduce policies that would put our people back to work and, in the process, help to put some of our ports back into effective operation.
However, we on Merseyside must be even more concerned about what is happening in the Common Market. I have taken a delegation of dockers' representatives to see the Minister and we have been given some fairly good assurances, but, if the Government were silly enough to agree to the development of Falmouth as

a container port, that might finish the port of Liverpool for all time. I am pleased to see the Under-Secretary of State for Transport, the hon. Member for Wallasey (Mrs. Chalker), shaking her head, but I am not sure that: that represents a commitment on behalf of the Government.
If Labour's policy of withdrawing from the Common Market is implemented after the general election, we shall be able to begin the process of rebuilding our trade on a world scale. The hon. Member for Dorking said that we had to be competitive because we were competing with international trade. That is not correct. We are not competing with international trade. Trade is increasingly being moved to the Common Market. If we get back to competing for international trade, I am sure that. although Merseyside, Glasgow, Bristol and other ports which were built up on international trade can never be the same as they used to be, their future will be much brighter than their recent past has been.
I do not know whether 'we can finish this debate by 10 o'clock, but the Minister will be pleased if we can. I shall therefore conclude my speech by saying what the Labour party will do when it gets back to office. This Government's policies of encouraging port to compete against port and allowing the ports on the west coast to run down must be stopped. Our ports need national planning. We need a national ports authority that will clearly take over and publicly own all the ports and make certain that we get development, where it is genuinely required, on the basis of this country turning towards world trade. That is the basic policy that the Labour party intends to follow when it gets back into office. That is the only hope for the ports and the workers in the industry. We can develop ship repair facilities, for instance, only on the basis of publicly owned ports with a clear commitment to ensure that there are proper ship repair facilities in the ports where ship repairing is required.
In Birkenhead the development board is considering whether the old western docks should be used for a new ship repairing yard or for housing. I hope that the docks will be used for a new ship repairing yard to employ ship repair workers again. It is a shame that in London, which had a huge ship repair force, in Merseyside and elsewhere that section of the industry has been allowed to run down.

Mr. Field: Does my hon. Friend agree that there is probably space to do the ship repairs in Cammell Laird and to have the housing on the western docks site?

Mr. Heffer: I do not know whether there is or not, but we must ensure that employment is created. The best way to do that is to have a plan rather than the present hit or miss approach.
We shall not vote against the Bill, because it will be useful to workers in the ports of Liverpool and London, but we are not satisfied with the Government's approach to the problems of the ports. The Labour party is looking forward to the time when it can carry out its plans.

Mr. Eyre: In the early part of his speech, the hon. Member for Liverpool, Walton (Mr. Heffer) gave in greater detail the case which I had summarised about the shift in port business from the west coast to the east and south coasts. I agree with a number of the points that he made in that part of his speech, but the hon. Gentleman must not blindly refuse to understand the adverse effect on


our economy of the deepest recession in world trade since the 1920s. I appreciate the fact that the hon. Gentleman welcomed the arrangements which I announced for the increased severance pay scheme that will apply to all registered dock workers, in whatever port they work.
The debate has ranged wider than the subject of the Bill and I welcome that. Many questions have been asked. I might have to write to some hon. Members in reply although I shall refer to as many as possible in the limited time available. I shall make a general statement about the Government's policy in relation to the Port of London Authority, to the Mersey Docks and Harbour Company in particular and to the industry in general. The hon. Member for Aberdeen, North (Mr. Hughes) talked of resentment in other ports because of the help being given to the PLA and MDHC. Other ports have experienced difficulties. I noted what the hon. Member for Glasgow, Garcadden (Mr. Dewar) said about the Clyde port authority.
I understand the difficulties and I sympathise, but no ports experience problems and difficulties of the magnitude of those that brought London and Liverpool to the brink of bankruptcy two years ago. The financial help which the Government provided for the MDHC and PLA is aimed at enabling them to cope with their problems—primarily with their large manpower surpluses—and to return to profitability as quickly as possible. As I said earlier, we stopped paying grants to PLA and MDHC to cover operating losses last December. We have no intention of resuming those subsidies. My hon. Friend the Member for Dorking (Mr. Wickenden) will welcome the emphasis placed on that announcement.
The hon. Member for Walton referred to Falmouth. He and other hon. Members, including the hon. Member for Birkenhead (Mr. Field) brought a deputation to see me on that matter. No application from Falmouth Container Terminal Ltd. is before the Government at present. It is up to the company to present a fresh application, with additional evidence of traffic and finances, if it wishes. I explained that that was the position when the deputation came to see me. Any such application will be considered in the light of the evidence and other relevant considerations, including the effects of the development on Falmouth and other United Kingdom ports.
The hon. Member for Aberdeen, North referred to the financial situation of the PLA. Since that is so important to the Bill, I shall respond to what he said. Even after the substantial capital relief proposed in the Bill, the PLA' s debts will remain high in relation to net fixed assets. The alternative is to write off even more public money than the £48 million proposed. We cannot see the justification for that. It is up to the PLA to work itself into a position which will allow borrowing on the commercial market.
The PLA is improving its balance sheet, but the Government have made it clear that they will continue to provide new loan finance where it makes financial sense —where it will not create a longer term millstone for the PLA. The Government recognise that a £5 million overdraft and a zero cash balance at the start of 1983 necessitate careful money management by the PLA. Nevertheless, on the basis of the plans put to Ministers it should be possible for it to operate successfully within the limit. The Government cannot and should not do

everything. We have given the PLA a sound basis on which to achieve viability. It is for the management and work force to make the most of the opportunity.
The hon. Member for Walton asked a new question about employee shareholding in Associated British Ports. There has been other reference to employee shareholding schemes. It is true that the shares issued under the special scheme involving free shares are held by trustees. As required by the Finance Act 1978, as amended, those shares will be held by the trustees for an initial period of two years. During that time they may not be sold except in the case of death, the attainment of statutory pensionable age by the beneficiary or cessation of employment by reason of redundancy or disability. For the following five years, after the two-year period, the trustees will retain such shares unless the employee concerned wishes to sell or otherwise dispose of them. They will then be transferred to the employee concerned. While the shares are held in trust, the respective employees will be the beneficial owners and they will be entitled to receive dividends and—the main question I was asked—they will be able to direct the exercise of voting rights in those shares.
I should like now to deal with the points raised by the hon. Member for Bristol, North-East (Mr. Palmer). I understand and appreciate Bristol's difficulties. I do not think that its position, however, is comparable to that of either the PLA or the MDHC. Most of Bristol's debt relates to the Royal Portbury dock, as the hon. Gentleman acknowledged. The Government have always made it clear that financial responsibility for this project lies solely with the Bristol city council. More important, the Government's policy remains that ports should stand on their own feet and that assistance is being given to the ports of London and Liverpool only because of the exceptional scale and nature of the problem that they face and because, without it, both ports would have gone out of business. In both cases, the Government were the only possible source of help. That is not the case with Bristol.

Mr. Palmer: What the hon. Gentleman is telling the ratepayers of Bristol is that they must just go on paying and paying for ever.

Mr. Eyre: The hon. Gentleman described the port as a municipal enterprise. It is true that that was its concept. Hon. Members representing Bristol, together with representatives of Bristol city council, put recently to my noble Friend Lord Bellwin proposals for different treatment of the city's expenditure on docks in the calculation of its grant-related expenditure. My noble Friend undertook to have these ideas examined in the grants working group in relation to the 1984–85 rate support grant settlement but he could not promise Bristol that the outcome of this examination would necessarily be to its satisfaction. I am glad to pay tribute to the way in which the port of Bristol refuses to accept that there is nothing that it can do. Thanks to energetic management, its conventional cargo traffic in the current trading year has held up very well compared with the previous year, in spite of the recession. It is winning some new business and hopes to take advantage of the new special severance terms for registered dock workers which are on offer from today to help bring its labour force more closely in line with its requirements.
I would have liked to make a number of points about Merseyside. There has been mention of the possibility of


Liverpool city council sending a deputation to be joined by hon. Members. The request relates to a number of matters affecting a number of Government Departments. I have been in touch with ministerial colleagues. I shall shortly be inviting the council to come to discuss this range of matters with me. I look forward to seeing the hon. Member for Walton and possibly the hon. Member for Birkenhead (Mr. Field) on that occasion.

Mr. Field: Before the Minister concludes his comments on Merseyside, will he answer the question asked by his hon. Friend the Member for Ludlow (Mr. Cockeram)? Is the £36 million coming without strings, or are the Government using this substantial sum of money to change what can only be described as the stubborn attitude of the dock company towards bringing forward land for development?

Mr. Eyre: If the hon. Gentleman will permit me to go on, I was just coming to the point that he and my hon. Friend the Member for Ludlow (Mr. Cockeram) raised. The hon. Member for Birkenhead and my hon. Friend suggested that the MDHC had an incentive to hang on to its surplus land. The Government accept that surplus land should be put to good use, and we have set up the Merseyside Development Corporation to regenerate large parts of Merseyside suffering from dereliction. Much of the MDHC surplus land holdings has already been transferred to the development corporation. The 400 acres of former MDHC land now owned by the development corporation include virtually all the company's former holdings in the south docks area of Liverpool and substantial areas on the Birkenhead side of the river.

Mr. Cockeram: Will my hon. Friend answer the question asked by the hon. Member for Birkenhead (Mr. Field) and myself—if the MDHC was a willing seller, why is it procrastinating and causing the somewhat lengthy procedures of compulsory purchase orders to be undertaken? It is that which is causing stagnation of the land year after year.

Mr. Eyre: I was seeking to explain to my hon. Friend and to the hon. Member for Birkenhead what I understood to be the position regarding the major holdings of land on the Liverpool and Birkenhead sides of the river. Perhaps my hon. Friend is referring to smaller and move specific areas of land. As I understand it, there has been a transfer of large areas of the land to which I am referring, and therefore I assume that my hon. Friend must be referring to other and smaller pieces of land. If my hon. Friend will let me make inquiries about this, I shall write to him and to the hon. Member for Birkenhead in detail on this point so that they will be able to consider the matter and make any representations in detail that they wish to make.
My hon. Friend raised another point, about the headquarters of the MDHC. I understand that the consultant accountants studied the cost of the headquarters, considered the cost of the transfer to other premises and, with the company, decided against it, but that nevertheless there has been a change. I am told that part of the commodious premises to which my hon. Friend referred has been let. I hope that my hon. Friend will find encouraging the adjustments that I am told that the MDHC is making in the conduct of its business.

Mr. Field: I look forward to receiving the Under-Secretary's letter, as I am sure does the hon. Member for

Ludlow (Mr. Cockeram). However, will the Under-Secretary answer my straightforward question? Does the £36 million come with or without strings? Are the Government using substantial sums of money to change the attitudes of the port authorities?

Mr. Eyre: I made it clear to the hon. Gentleman and to the House in my opening speech that the Government had been requiring both the MDHC and the PLA to take proper measures to achieve viability.

Mr. Field: rose—

Mr. Eyre: The hon. Gentleman is preventing me from referring to the points made by his hon. Friend the Member for Newham, South (Mr. Spearing). I should like to refer to many of the points made by the hon. Member about the land in or near Newham. However, he has a misunderstanding about the land in the royal docks. It would be better if, again, I wrote to the hon. Gentleman, and I would be pleased to take up his points and explain the misunderstanding.
This is a useful and straightforward Bill, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Mr. Speaker: Money resolution—

Mr. Spearing: On a point of order, Mr. Speaker. I seek your guidance. Is the Bill exempted business?

Mr. Speaker: It would have been if we had passed the Ten o'clock business motion.

PORTS (REDUCTION OF DEBT) [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to make provision for reducing the indebtedness of the port of London Authority and the Mersey Docks and Harbour Company, it is expedient to authorise—

(a) the release of those bodies from their liability to repay money lent to them under section 11 of the Harbours Act 1964 and section 1 of the Ports (Financial Assistance) Act 1981 up to a maximum of £26 million in the case of the Port of London Authority and £36 million in the case of the Mersey Docks and Harbour Company;
(b) the payment out of moneys provided by Parliament of sums not exceeding £22 million for enabling the Port of London Authority to repay a loan or loans guaranteed under section 1 of the said Act of 1981.—[Mr. Douglas Hogg]

Mr. Spearing: It is just not good enough.

It being Ten o'clock, Mr. SPEAKER proceeded to put forthwith the Questions which he was directed by paragraph (2)(c) of Standing Order No !8A (Consideration of Estimates) to put at that hour.

SUPPLEMENTARY ESTIMATES, 1982–83, Class XIII, Vote 23

Question,
That a Supplementary sum not exceeding £414,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1983 for expenditure by Her Majesty's Stationery Office on the reimbursement of the trading fund in


respect of stationery and printing supplied to the Houses of Parliament and to United Kingdom Members of the European Assembly.

put and agreed to.

Class II, Vote 10

Question,
That a further Supplementary sum not exceeding £1,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1983 for expenditure by the Foreign and Commonwealth Office (Overseas Development Administration) on the official United Kingdom aid programme including pensions and allowances in respect of overseas Service, assistance to certain refugee students, grants in aid, certain subscriptions to international organisations and certain payments under the Commonwealth Scholarship and Fellowship plan.

put and agreed to.

It being after Ten o'clock, Mr. SPEAKER proceeded to put forthwith the Questions which he was directed by paragraphs (7) and (11) of Standing Order No. 18 (Business of Supply) to put at that hour.

ESTIMATES, 1983–84 (NAVY), VOTE A

Question,
That during the year ending on 31st March 1984 a number not exceeding 75,000 all ranks be maintained for Naval Service.

put and agreed to.

ESTIMATES, 1983–84 (ARMY), VOTE A

Question,
That during the year ending on 31st March 1984 a number not exceeding 185,000 all ranks be maintained for Army Service, a number not exceeding 134,500, for the Individual Reserves, a number not exceeding 86,000 for the Territorial Army and a number not exceeding 12,600 for the Ulster Defence Regiment.

put and agreed to.

ESTIMATES, 1983–84 (AIR), VOTE A

Question,
That during the year ending on 31st March 1984 a number not exceeding 94,750 all ranks be maintained for Air Force Service, a number not exceeding 12,675 for the Royal Air Force Reserve and a number not exceeding 1,120 for the Royal Auxiliary Air Force.

put and agreed to.

SUPPLEMENTARY ESTIMATES, 1982–83

Question,
That a further supplementary sum not exceeding £1,586,495,000 be granted to Her Majesty out of the Consolidated Fund, to defray the charges which will come in course of payment during the year ending on 31st March 1983 for expenditure on Defence and Civil Services, as set out in House of Commons Papers Nos. 185, 186 and 219.

put and agreed to.

ESTIMATES, EXCESSES, 1981–82

Question,
That a sum not exceeding £68,277,715·78 be granted to Her Majesty out of the Consolidated Fund to make good excesses on certain grants for Civil and Defence Services for the year ended 31st March 1982, as set out in House of Commons Paper No. 184.

put and agreed to.

Bill ordered to be brought in upon the foregoing Resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Leon Brittan, Mr. Nicholas Ridley, Mr. Jock Bruce-Gardyne, Mr. Barney Hayhoe and Mr. John Wakeham.

CONSOLIDATED FUND (No. 2)

Mr. Jock Bruce-Gardyne accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31 March 1982 and 1983; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 101.]

MENTAL HEALTH (AMDT) (SCOTLAND) BILL [LORDS]

Order for Second Reading read.

Ordered,
That the Bill be committed to a Scottish Standing Committee. —[Mr. Douglas Hogg.]

MENTAL HEALTH (AMDT) (SCOTLAND) [MONEY]

Queen's Recommendation having been signified.

Resolved
That, for the purposes of any Act of this Session to amend the Mental Health (Scotland) Act 1960 it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to any such Act in the sums so payable under any other Act.—[Mr. Douglas Hogg.]

War Criminals

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]

Mr. David Winnick: Some people may find it strange that, 38 years after the last war, the matter of Nazi war criminals should be raised in the House tonight. But the time which has elapsed can make no difference to the need to ensure that those who committed the most terrible crimes against humanity should be brought to justice.
Earlier this year, I received an answer to a parliamentary question informing me that war-time and post-war agreements which provided for the arrest and bringing to judgment of Nazi war criminals remained in force.
I decided to apply for this Adjournment debate after reading in the press that Walter Rauff, one of the most notorious of war-time SS officers, was living in Chile and, apparently, under his own name. I said
one of the most notorious war-time SS officers".
I should have added "and killers". The Daily Telegraph correspondent, in the issue of that newspaper on 10 February, reported this case. Mr. Tony Allen-Mills wrote that Rauff, whom he described as one of the most notorious Nazi mass murderers known to be still alive, had become the focus of the continuing hunt for war criminals since Barbie was extradited from Bolivia.
This criminal, Rauff, who has been in Chile for many years, apparently lives in considerable comfort, and, according to Mr. Allen-Mills, Rauff's address is even in the telephone book. So there is no dispute that Rauff lives in Chile. He makes no secret of the fact, and he lives under his own name.
Why should we in this country be concerned, as I believe we should, about this Nazi criminal? Why have I taken this opportunity to apply for an Adjournment debate to deal with Mr. Walter Rauff? What crimes did he commit?
As I said, Rauff was a top SS officer, very close to Himmler and Heydrich. He is held responsible for the mass murders of hundreds of thousands of people. Again, there seems to be no doubt about his guilt. His particular speciality in mass murders was the mobile extermination trucks. Civilians, including young children, were locked into the vehicle, and exhaust gases were pumped into it, with the prisoners inside.
In a plea to the Chileans to extradite him, the noted hunter of Nazi war criminals, Simon Wiesenthal, stated that, between 1941 and 1942 alone, approximately 250,000 people were murdered by the method that I have just described, and that they were murdered in Poland, Lithuania, Latvia, the Ukraine and Yugoslavia. That is the type of person, criminal, and mass murderer, who today lives in Chile under his own name, and where apparently the western powers have shown little interest in bringing him to justice. During Eichmann's trial in Jerusalem, Rauff's name and crimes were mentioned.
What am I doing tonight? I am asking the Government to put pressure on the Chileans for Rauff to be extradited, and to request the United States authorities to do the same.
I received a reply from one of the Foreign Office Ministers—not the Under-Secretary of State who is to reply to this debate. In the letter that I received last week,

I was told that the arguments against an official British initiative were compelling. I confess that I did not find the reasons compelling. Nor did I find compelling the arguments that were advanced in that letter—no doubt, drafted in the normal way by Foreign Office officials. It seems that the West Germans have had the responsibility since 1955 for bringing war criminals to justice. I accept that that is the legal position. I realised that when I wrote my letter to the Foreign Secretary in the first place. I was told in the letter that Britain has had no formal legal grounds for making representations to the Chileans. However, the Minister recognised that that did not necessarily prevent the Government from making representations. Of course it does not. However, the Minister concluded that it was doubtful whether there would be any point in pressing the Chilean authorities to extradite Rauff to West Germany.
It seemed to me, when I read that letter, that the Government were washing their hands of the whole matter. The letter referred to our broader interests. I am not sure what those broader interests with Chile are, but I should have thought that no interest was more important in this matter than that this country should do its utmost to see that that criminal in Chile is brought to justice. If Rauff were in Cuba, would I receive the same sort of reply? Would the Government be as non-committal as they are about Rauff being in Chile?
As for Britain's responsibilities and the legal grounds, I remind the Minister of the case of Mr. Shcharansky. I have no quarrel with the fact that the Government made representations to the Soviet authorities; they were right to do so. But on what basis did they do so? Presumably because of public opinion and deep concern in Britain about the way in which Mr. Shcharansky has been treated. If the Government made representations about the case of Mr. Shcharansky, how much more important it is that we, the first country with France to declare war against Germany because of Nazi aggression against Poland, who bore the brunt of responsibility before the United States and the Soviet Union entered the war and who made so much sacrifice to eliminate Nazism from Europe, should not shrug off our responsibilities in the way that was done in the reply to my letter. That response is rather like saying that it is unfortunate that the man has got away scot-free, but that so much time has elapsed that there are no legal grounds for taking action. I have no intention of accepting that as an argument.
I mean no disrespect to the Minister. He has his brief. He is not in the Cabinet and must do his duty as any Under-Secretary would. However. if the Minister's reply today is the same as the reply that I have already received—as I assume it will be—I do not have the slightest intention of letting the matter go. With my right hon. and hon. Friends, I shall continue the campaign, and I shall certainly take the matter outside the House in trying to arouse public opinion about Rauff's war crimes.
The allied Governments pledged that those who committed such terrible crimes, such atrocities, on behalf of the Third Reich would be brought to justice. That clear pledge was made during the war years, and it was their right to make such a pledge. It would make a mockery of those pledges if Britain and the United States simply allowed Rauff to go scot-free and not to make the effort necessary to bring him to justice.
A few weeks ago some hon. Members, including myself, were worried that Barbie would not be extradited


from Bolivia. There was some justified pessimism, but I am, of course, pleased that Barbie has been extradited. There must be no false sentiment about him. At long last he is in French custody and will shortly be tried in the same way as other war criminals have been tried—indeed, as Eichmann was tried 20 years ago in Israel. That is the right and proper course. Justice will take the course that one expects in a country, such as France, that is ruled by law. With Barbie in French custody, it is now necessary that Rauff should be extradited to one of the European countries—be it West Germany, Yugoslavia, Poland, or whatever country can try him—so that he can face justice according to the pledge that was made during the war years.
Three weeks ago the Prime Minister made a highly publicised speech in which she tried to draw an analogy between events in the 1930s and now. She was obviously on the offensive against the peace movement. As is to be expected, I disagreed with the Prime Minister's remarks. My view, and that of my right hon. and hon. Friends, was that she made a false analogy. Sadly, she refused to face the fact that she represented a party that was responsible for much appeasement of the Nazi dictators during the 1930s. Whatever the arguments of the Labour party over defence then, its worst critics could not say other than that from the very beginning we had warned of the dangers of Hitler, Mussolini and Franco. There was no fellow-travelling by us with the Fascist dictators. Some people may say that that is all in the past.
If the Prime Minister is concerned about the crimes of the Nazis, and leaving aside the Labour view that the Prime Minister was making a false analogy, a real Nazi by the name of Walter Rauff is alive and lives in Chile. He committed the most monstrous crimes against humanity. What will the Prime Minister do to ensure that that criminal is brought to justice?
I accept that the United States of America has more influence with the Chilean junta than Britain. I should like the Government to apply pressure on the United States so that it can apply as much pressure as possible on Chile —the ally that it is responsible for arming—for Rauff to be extradited.
If the pressure and representation for which I am asking occurred from Britain and the United States of America, there is little doubt in my mind that, as with Eichmann and Barbie, Rauff would be extradited to face justice. The sooner that that criminal faces justice, the better, and the more Britain and other powers will have honoured the pledge they gave in the war years—that the victims of Nazism would not be forgotten, and that their tormentors, torturers, persecutors and mass murderers would be brought to justice once Hitlerism was defeated.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): I am grateful to the hon. Member for Walsall, North (Mr. Winnick) for raising this subject and enabling me to set out the Government's position on the important issue he has raised in this debate. I assure him that I do not believe that, after 40 years, these matters should be quietly forgotten. Nor is that the view of Her Majesty's Government. The

subject of this Adjournment debate is not about one individual but the general queston of the discovery and prosecution of war criminals.
In the light of the hon. Gentleman's interest in this subject, I trust that he will agree with me that it would be appropriate for me to confine my remarks this evening to war crimes committed in the European theatre. I do not intend to comment on the position regarding war crimes in the Far East, although British personnel suffered worse and more severely through war crimes committed by the Japanese than by those in Germany. It is clear that the hon. Gentleman's interest for the purposes of this debate regards the European position. The hon. Gentleman made it clear in his comments that he is well informed about the discussions that took place in Whitehall between the wartime allies regarding the discovery and prosecution of major war criminals. He will be aware that these eventually led to the trial of 24 major war criminals before a quadripartite international military tribunal at Nuremberg. Of the criminals arraigned at Nuremberg, only one, Martin Bormann, is not definitely accounted for. He is presumed to be dead, although there has been no conclusive evidence of that fact.
In 1945 Nazi war crimes were found to have been committed in all parts of Germany, in all the countries that had fallen under German rule and also on the high seas. The horror reached its greatest extent in territories under German control in the east. However, the extent of Nazi crimes was vast enough in the British zone. The military authorities at the time found themselves overwhelmed with evidence. They lacked neither the power nor indeed the will to proceed. The record shows that they did so diligently. It is not surprising that they fell some way short of completing what was probably an impossible task.
The evidence of the period from 1943, the time of the Moscow agreement, until 1945 suggests that many failed to foresee the enormity of mass murder for which the evidence confronted our troops as they entered Germany in the spring of 1945.
Many doubted that the Germans would divert vital scarce resources, notably of transport, military personnel and slave labour, to pursue the policy of extermination even after the tide of war had obviously turned against them. I am thinking particularly of the massive deportation to Poland of Jews from countries as far afield as Hungary and France.
It is useful to recall the circumstances in which the awful evidence of Nazi crimes was exposed as the allied armies entered Germany in the closing stages of the war. The central fact, which is highly relevant to this debate, about the discovery and prosecution of war criminals is that there was absolute confusion in Germany in the closing stages of the war. The cities were in ruins, transport was at a standstill and there were tens of thousands of displaced persons, deserters, refugees and others moving hither and thither, living where they could. There were no services, no government, and there was a threat of starvation and disease. In short, there was chaos.
It is thus not surprising that discovering and prosecuting war criminals in the British zone of occupation by the Judge Advocate General —but also in other zones—produced results which, in retrospect, seem very incomplete and which undoubtedly were very incomplete. The commanders on the spot frequently had to decide whether to allocate resources to bringing some order out of chaos and, in particular, to preventing epidemics, which


could so easily have spread to their own troops, or to give top priority to the discovery and prosecution of war criminals. One can understand those who decided that it was more urgent to save the living than to exact vengeance for the dead at that time.
Our authorities also faced the considerable problem of extracting from mountains of captured records evidence that would stand up in court as proof of the guilt of particular individuals in respect of particular crimes. The hon. Gentleman will he well aware that many cases had to be dropped because of the absence of sufficient conclusive evidence that would satisfy a court of law. However, I have not yet dealt with the case of war criminals whose names, misdeeds and locations were discovered, and who were for various reasons protected or even employed by any one of the four occupying powers.
The hon. Gentleman referred to the case of Klaus Barbie, and he is an example of exactly that phenomenon. In a good many cases those concerned might feel today that they got their priorities wrong. It was a matter for their judgment at the time, and it it a matter for their consciences today. As the hon. Gentleman knows, with the exception of the major criminals arraigned at Nuremberg, responsibility for the discovery and prosecution of war criminals was soon transferred to the German authorities. The transfer was well under way by 1950 and was complete when the allied occupation of western Germany ended in 1955.
From his remarks, it seems that the hon. Gentleman may have doubts about the desirability of that transfer to the German authorities. He may believe that the British Government at least should have continued to play a more active role to keep the Germans up to the mark. I can understand his point of view. There were cases in the early years of the federal republic when civil servants, and others with records that invited investigation, were restored to senior posts. But, against that, I do not doubt that the basic decision to transfer responsibility for the prosecution of alleged war criminals to the federal German authorities was the correct one.
After the war the objectives of western allies were, or at least quickly became, rehabilitation and reconstruction, leading to the return of Germany to the family of democratic nations. By every standard that policy has turned out to be an unqualified success. One of its most important ingredients in the early years was that the Germans should themselves face up to the enormity of the crimes committed by their leaders and in their name. It must not be forgotten that a great many victims of the Nazis were Germans. I am not simply thinking of German Jews, although they were clearly one of the most important categories. The camp system, established immediately after the Nazis came to power in 1933, was horribly efficient by 1939. In some of the most notorious, such as the Buchenwald forced labour camp, the vast majority of the victims—even at the end of the war—were Germans.
Well before 1939, German Communists, Social Democrats, Jews, homosexuals, Jehovah's Witnesses, religious leaders, academics, artists, gipsies and others had all met the same death, which the Nazis were later to mete out in so many other countries beyond the frontiers of Germany. In the last nine months of the war, following the attempt on Hitler's life in July 1944, several hundred more Germans were rounded up and executed. Thus the German authorities, established in what became the Federal Republic of Germany, did not lack either

motivation or interest in discovering and prosecuting Nazi criminals. As is well known, and as the hon. Gentleman said, a number of the most notorious Nazis escaped from Europe to the Middle East and South America. The hon. Gentleman argued eloquently that the precepts of justice, honour and good international relations require the wartime allies in general, and the United Kingdom in particular, to keep up the pressure on the authorities in countries such as Bolivia, the Argentine, Chile and Paraguay to extradite known Nazi criminals.
As my noble Friend Lord Belstead, the Minister of State, said in the letter to the hon. Gentleman to which he has referred,
the arguments against an official British initiative are compelling".
I shall explain that statement, using in particular the case of Walter Rauff to which the hon. Gentleman has referred. I in no way dissent from the hon. Gentleman's description of that gentleman and the allegations of war crimes levelled against him.
I ask the hon. Gentleman to reflect on the prospects for a successful British initiative, bearing in mind that there have already been three German requests to the Chilean authorities for his extradition. The hon. Gentleman talked about pressure on the Chilean junta. I know that the hon. Gentleman does not have a complimentary opinion of the present Chilean authorities but I hope he will bear in mind that at least one of the representations made by the Federal German authorities to the Chilean Government for the extradition of Walter Rauff was to the late President Allende, and that it had as little success as the other representations.

Mr. Winnick: I knew that the Minister would make that point. Would he accept that if Chile had remained a democracy there would have been greater opportunities for pressure to be mounted? Obviously at that time the case of Rauff was not so well known in the West. Certainly it was not raised in Britain or the United States. It is interesting to note that, since the change of Government in Bolivia, Barbie was extradited.

Mr. Rifkind: That is reasonable as a general proposition. As a general proposition, a democratic regime is more likely to understand, to be sympathetic to and to respond to the desire of the Federal Republic of Germany to extradite war criminals than a military junta would be, but that is by no means a guarantee, as my reference to the late President Allende shows. Even a head of state of Chile, with clearly Left-wing views, and an elected president rather than a dictator, was not prepared to respond to representations from the Federal German Government. That factor has to be taken into account.
More important than the prospects of success or failure is the point that, after handing over responsibility in the matter to the Federal German Republic 30 years ago, it is not for us now to resume that responsibility. We are not in the same position as the French in the case of Barbie, to which the hon. Gentleman referred. Barbie was convicted by a French court in absentia before the occupation of Germany came to an end. The Germans themselves have welcomed—and, I do not doubt, discreetly supported—the French efforts, now successful, to secure the extradition of Barbie from Bolivia.
As my right hon. Friends the Prime Minister and the Foreign and Commonwealth Secretary have made clear in replies to questions from the hon. Member, there is British


legal machinery available to deal with any cases that may arise where prosecution by the British authorities would be appropriate, but I remind the hon. Gentleman that neither my right hon. Friend the Secretary of State for Defence nor I are aware of any outstanding case that could fall within our jurisdiction under any treaty to which we are party. I believe that it is right for us, none the less, to stand ready to help others with the resources of our experience and our archives, if indeed our help should be sought.
Clearly, the primary responsibility for representations to the Chilean authorities in the case to which the hon. Gentleman has referred must rest with the Federal German Republic. If they believed that any assistance that we could give them might assist them in the objects that they are pursuing, obviously we would give very careful consideration to any requests for assistance that the Federal German Republic might make to us. That is the least we could do, and clearly our own record in matters of this kind would show that we would respond as sympathetically as possible to requests of that kind.
I ask the hon. Gentleman to accept that, where there is not a direct British legal responsibility, the primary

responsibility in a matter of this kind must rest with the Federal German Government. It is for them to decide what is the most realistic way to seek to make progress. For me to say that does not imply any lack of interest on our part, nor any lack of agreement with the basic argument that the hon. Gentleman has made as to the desirability of war criminals who have committed the most horrendous crimes being brought to justice, before a court of law, which can judge their guilt and pass sentence if they are convicted. There is no disagreement between us on that, but I ask the hon. Gentleman to accept, in regard to the making of representations in the case to which he has referred, that it is only sensible and appropriate for the Federal German Government—a democratic Government who believe in the rule of law, and who are as concerned as the hon. Gentleman to see war criminals brought to justice—to take the lead in a case of this kind. As I have said, our view and our actions will obviously take into account any requests received from them. That, I believe—I hope that the hon. Gentleman will accept it—is the proper course to take, and a proper response for Her Majesty's Government.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.